What is a mortgage in principle?

A mortgage in principle (MIP) – also called an agreement in principle (AIP) or decision in principle – is essentially a lender’s way of saying “yes, we’d probably lend you this much to purchase a property”.

Think of it as a conditional thumbs up. The lender takes a quick look at your income, outgoings, and credit score, then gives you an estimate of how much they’d be willing to lend you. It’s not a guarantee, and you’ll still need to go through a full mortgage application later, but it’s a strong indication of what you could borrow.

Whilst you don’t legally need a mortgage in principle to buy a house, you could miss out by not getting one. It’s pretty much essential in today’s property market.

Estate agents prefer it.

While most agents will still show you properties without an MIP, having one makes the process smoother. Some agents might ask about your budget or mortgage approval status before booking viewings for expensive properties, but it's more about managing expectations than refusing to help.

Sellers take you seriously.

When you make an offer, having a MIP shows you’ve done your research and are ready to buy. Sellers are more likely to accept an offer from a buyer who can prove they’re financially ready to proceed.

You’ll know a realistic budget.

That dream house might look perfect online, but if it’s £50,000 over what you can borrow, you’re setting yourself up for disappointment. A MIP gives you clear boundaries for your property search giving you to have a much better understanding of what you can afford.

Getting a mortgage in principle nowadays is pretty straightforward – most lenders can give you one in minutes, here’s how to get one:

Online applications are the quickest

Most major lenders have online tools that take about 10 minutes to complete and get you your MIP almost instantly. You’ll just need to provide some basic details like your income, monthly outgoings, employment status, and deposit amount.

Mortgage brokers can shop around for you

If you’re not sure which lender to approach or need some support, a mortgage broker can do the legwork for you. They’ll try to find the best deals for your situation. They will often have access to exclusive rates you can’t get directly from lender, and they handle all the paperwork. Just keep in mind that some may charge fees, whilst others get commission from lenders.

You can apply directly with your bank

Many people start with their own bank because it feels familiar, convenient, and you may even get a special rate for being their customer. The application might be slightly quicker since they already have your account history, but remember to shop around – you might be able to find a better deal elsewhere.

Most mortgage agreements in principle are valid for 60 to 90 days, though this varies between lenders. Some might give you as little as 30 days, while others offer up to 6 months.

Check your certificate for the exact expiry date 

Your MIP will clearly state when it runs out, so make sure you know this before you start house hunting seriously.

What happens when it expires?

You'll need to apply for a new one if you haven't found a property yet. The good news is that you might be able to renew your previous one. If not, reapplying is usually just as quick as the first time, assuming your circumstances haven't changed significantly.

Most lenders use a 'soft credit check' for mortgage in principle applications, which won't affect your credit score. Soft checks don't leave a mark that other lenders can see.

Some lenders however may use "hard credit checks" instead, which do appear on your credit file. Always check with the lender beforehand which type of search they use.

The full mortgage application later will involve a hard credit check regardless.

Once you have your mortgage in principle, you can start house hunting with confidence. Your MIP certificate shows estate agents and sellers that you're a serious buyer with lending already lined up.

When you find a property and your offer is accepted, you'll need to progress to a full mortgage application. This is much more detailed than your MIP - the lender will want to see payslips, bank statements, and proof of your deposit. They'll also arrange a property valuation to make sure the house is worth what you're paying for it.

Your MIP isn't a guarantee. The lender will reassess everything during the full application process. If your circumstances have changed since getting your MIP, or if there are issues with the property valuation, they might offer different terms or even decline your application.

The process typically takes several weeks. While your MIP gave you an answer in minutes or hours, the full mortgage application could take 2-6 weeks to complete, depending on how quickly you can provide the required documents.

Keep your finances stable. Between getting your MIP and completing your full mortgage application, avoid taking on new debt, changing jobs, or making any major financial changes that could affect your lending.

Once your full mortgage is approved, you can proceed to exchange contracts and complete your purchase.