Mortgage in principle explained
What an agreement in principle is, and why estate agents ask for one.
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What it is
A mortgage in principle, also called an agreement in principle or decision in principle, is a statement from a lender saying how much it would probably lend you, based on your income, outgoings and a credit check. It is not a guaranteed offer.
Why you need one
- It shows you a realistic budget before you start viewing.
- Estate agents often ask for one before taking an offer seriously.
- It shows sellers you are a serious buyer.
Credit checks
Many lenders use a soft credit search for an agreement in principle, which other lenders cannot see. Some use a hard search, which is recorded on your credit file. Ask which they use, and avoid applying with lots of lenders at once.
How long it lasts
Usually 30 to 90 days, depending on the lender. You can renew it if your search takes longer.
Agreement in principle vs mortgage offer
| Agreement in principle | Mortgage offer | |
|---|---|---|
| When | Before you find a home | After your offer is accepted and you apply |
| Checks | Basic details and a credit check | Full application, documents and a valuation |
| Binding? | No | A formal offer, subject to conditions |
Estimate repayments with our mortgage calculator. A mortgage adviser or broker can help you compare lenders.
Frequently asked questions
Does a mortgage in principle affect my credit score?
A soft search does not. A hard search is recorded on your file. Ask the lender which they use.
Can I get a mortgage in principle from more than one lender?
Yes, but too many hard searches in a short time can affect future applications.
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