Home Buyer's Guide 2025

Mortgage Agreement in Principle: A Simple Guide

Understand what a Mortgage in Principle is, why you need one, and how to get it. Your first step to confident house hunting in the UK.

8 min read
Published August 2025
Written by NewBuildHomes

What is a Mortgage in Principle?

A Mortgage Agreement in Principle (AIP), also known as a Decision in Principle (DIP), is a written statement from a mortgage lender indicating how much they would be willing to lend you based on an initial financial assessment. It's not a formal mortgage offer, but it's a crucial first step in the home buying process. It shows sellers and estate agents that you are a serious and credible buyer.

Key Takeaways

  • Boosts Credibility: An AIP shows you're a serious buyer, giving you an advantage when making offers.
  • Sets Your Budget: It gives you a clear and realistic budget for your property search.
  • Soft Credit Check: Most AIPs only require a 'soft' credit check, which won't affect your credit score.
  • Not a Guarantee: It is not a formal mortgage offer. You'll still need to complete a full application for that.

How to Get a Mortgage in Principle

1

Gather Your Documents

You'll need details of your income, regular outgoings, address history, and proof of identity.

2

Choose Your Route

You can apply directly with a lender (like a bank) or use a mortgage broker who can search the market for you.

3

Complete the Application

Fill in the application form online, over the phone, or in person. It usually takes less than an hour.

Information You'll Need

  • Proof of income (payslips, accounts)
  • Bank statements (usually 3-6 months)
  • Details of any existing debts or loans
  • Proof of deposit amount
  • Address history for the last 3 years
  • Photo ID (passport or driving licence)

Direct Lender vs. Mortgage Broker

Direct Lender

Going directly to a bank or building society you know.

Pros:

  • May have exclusive deals for existing customers.
  • No broker fees.

Cons:

  • You only see their products, not the whole market.
  • You have to do all the research and application yourself.

Mortgage Broker

An independent expert who compares mortgages from multiple lenders.

Pros:

  • Access to a wide range of lenders and deals.
  • Expert advice and handles the application for you.
  • Can be invaluable for complex situations.

Cons:

  • Some brokers may charge a fee for their service.

Frequently Asked Questions

Ready to Start Your Search?

With your Mortgage in Principle, you have a clear budget and can confidently search for your new home. Browse thousands of new build properties today.