Mortgage in principle explained: what it is and why you need one
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Quick answer: A mortgage in principle (also called an agreement in principle or decision in principle) is a lender's indication that they would likely lend you a given amount based on a credit check and basic income details. It is not a guarantee, but estate agents and sellers take it seriously.
Before you start viewing properties seriously, most estate agents ask for a mortgage in principle. It shows you are a credible buyer with finance lined up. The process is quick — often online in minutes — and involves a soft or hard credit search depending on the lender.
How to get a mortgage in principle
You can apply directly with a bank, through a mortgage broker, or via comparison sites. You will need your income, employment details, existing debts, and address history.
The lender runs a credit check and applies their affordability rules to give a maximum loan figure. This typically takes a few minutes online or a day through a broker.
DIP vs formal mortgage offer
A decision in principle (DIP) is a preliminary assessment. A formal mortgage offer comes after a full application, property valuation, and detailed underwriting — usually weeks later.
Between DIP and offer, the lender may change the amount, rate, or decline entirely if your circumstances change or the property is unsuitable.
Tips for a smooth process
Get your DIP before making offers on properties. Sellers prefer buyers who can proceed quickly.
If you are planning to apply for other credit soon, ask whether the DIP uses a soft search to avoid multiple hard searches on your file.
Refresh your DIP if it expires before you find a property — rates and lending criteria may have changed.
Common questions
Does a mortgage in principle guarantee I will get a mortgage?
No. It is an indication, not a commitment. A full application with property valuation and detailed checks is required for a formal offer.
How long does a mortgage in principle last?
Typically 60 to 90 days. After that, you need to reapply. The amount may change if rates or your circumstances have shifted.
Will it affect my credit score?
It depends on the lender. Soft searches are invisible to other lenders. Hard searches appear on your file for 12 months and can temporarily lower your score.