What is a mortgage in principle?
A mortgage in principle, sometimes called an agreement in principle or decision in principle, is a lender's estimate of how much they might lend you, based on basic details about your income, outgoings and credit history.
It isn't a guaranteed mortgage offer — that only comes after a full application, valuation and underwriting — but it gives you a realistic budget and shows estate agents and sellers that you're a serious, prepared buyer.
Most mortgages in principle are valid for 60 to 90 days and can usually be obtained online within minutes.
How does a mortgage in principle work?
You provide details such as income, employment status, deposit size and any existing debts, and the lender runs a soft credit check that doesn't affect your credit score.
Based on this, they issue a certificate stating the amount they'd be likely to lend, which you can show when making offers on properties.
Here's a fictional example:
Meet Elliot, preparing to start house hunting
Elliot has a £25,000 deposit and earns £42,000, and wants to know his budget before booking any viewings.
He gets a mortgage in principle for £185,000 within about ten minutes online, giving him a realistic total budget of around £210,000 including his deposit.
When he later makes an offer on a £205,000 flat, the estate agent asks to see the certificate, which strengthens his offer against other interested buyers.
What forms does a mortgage in principle take?
Soft-search agreement in principle
Based on self-declared details and a soft credit check, with no impact on your credit score.
The most common type and usually issued instantly online.
Full agreement in principle with credit check
Some lenders run a fuller check including a look at your credit file for a more accurate figure.
Still generally soft-searched, but worth confirming with the lender before applying.
Broker-issued agreement in principle
A mortgage broker obtains this on your behalf, often comparing which lender is likely to offer the most favourable figure.
Useful if your circumstances are slightly complex, such as being self-employed.
When should I get a mortgage in principle?
It's worth getting one:
- 1
Before you start viewing properties
So you know your realistic budget and don't waste time on properties out of reach.
- 2
Before making an offer
Sellers and agents often require one to prove you can proceed, strengthening your negotiating position.
- 3
When your circumstances change
A new job, pay rise or cleared debt can shift the figure, so it's worth refreshing before you commit.
What do I need to get a mortgage in principle?
You'll typically be asked for:
Proof of income: Your salary or self-employed earnings, though formal documents usually aren't needed at this stage.
Deposit amount: How much you have saved or available, since this affects your loan-to-value.
Existing debts and commitments: Credit cards, loans and other regular outgoings that affect affordability.
Basic personal details: Name, date of birth and address history to run the soft credit check.
Employment status: Whether you're employed, self-employed or on a fixed-term contract, as this can affect which lenders to approach.
How to compare mortgage in principle providers
It isn't a live mortgage deal yet, so compare providers on these instead:
- 1
Soft search vs hard search
Confirm the check is soft-searched and won't appear to other lenders on your credit file — most are, but a few lenders still run a fuller check.
- 2
How the figure is calculated
Lenders weigh income, existing debt and outgoings differently, so the same person can get noticeably different figures from different providers.
- 3
Validity period
Most agreements in principle last 60-90 days — check the expiry date so it doesn't lapse mid house-hunt.
- 4
Speed to issue
Most online agreements in principle are issued within minutes; a few lenders take longer or require a call.
- 5
Route to a full application
Check whether the same lender lets you convert the agreement in principle into a full application without starting over.
Mortgage in principle pros and cons
Pros
- Usually free and quick to obtain
- Doesn't affect your credit score if soft-searched
- Shows sellers and agents you're a serious buyer
- Gives you a clear, realistic budget
Cons
- Not a guaranteed final mortgage offer
- Based on limited, self-declared information
- Can expire before you find the right property
- Different lenders may quote quite different figures
Does a mortgage in principle guarantee my mortgage?
No. It's an early indication based on limited information, and the full application later involves a detailed review of your documents, a property valuation and full underwriting.
It's possible for a full application to be declined or offered at a lower amount than the mortgage in principle suggested, particularly if your circumstances have changed or the figures don't fully verify.
Even so, it's a genuinely useful first step, giving you a realistic budget and demonstrating seriousness to sellers, which can matter in a competitive market.
What happens if I can't keep up mortgage repayments?
Missing payments on your mortgage is reported to credit reference agencies and can ultimately put your home at risk, since the property is used as security for the loan.
Contact your lender as soon as you think you'll struggle. Under FCA rules, lenders must treat customers in financial difficulty fairly and can often offer a temporary reduced payment, a term extension or a short payment holiday.
Free, independent guidance is available from MoneyHelper and Citizens Advice, and speaking to your lender early keeps far more options on the table than waiting until arrears build up.
What if I can't get a mortgage in principle?
If you're struggling to get one approved, consider:
Speaking to a mortgage broker
A broker can identify which lenders are more likely to accept your circumstances before you apply.
Improving your credit file first
Clearing small debts and correcting errors on your credit report can improve the figure you're offered.
Waiting and reapplying after a pay rise or bonus
A higher, provable income can significantly change how much a lender is willing to offer.
FAQs
About this guide
Written and reviewed by the Grow Your Business team, and kept up to date as rates, rules and provider terms change.
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