If you’re planning to buy a home, one of the smartest first steps you can take is to get a Mortgage Agreement in Principle (AIP)—also known as a Decision in Principle (DIP). It gives you an indication of how much you could borrow from a mortgage lender, helping you understand your budget and showing sellers you’re a serious buyer.
In this guide, we’ll break down everything you need to know about mortgage agreements in principle—how they work, why they matter, and how to get one quickly and easily.
Why Get a Mortgage Agreement in Principle?
A mortgage agreement in principle:
Shows estate agents and sellers that you’re financially ready to proceed
Helps you understand what you can afford before viewing properties
Speeds up the mortgage application process later on
In competitive markets—particularly in popular coastal and commuter towns—having an AIP can give you the edge over other buyers.
What Is a Mortgage Agreement in Principle?
A mortgage agreement in principle is a statement from a lender confirming how much they might be willing to lend you, based on basic details about your income, expenses, and credit history.
It’s not a legally binding mortgage offer, but it’s a reliable starting point in the home-buying process.
Types of Mortgage Agreements in Principle
While the process for obtaining an AIP is similar across the board, there are a few different types depending on your property goals. Each serves the same purpose—to show how much you could borrow—but the context can vary:
1. Residential Mortgage AIP
This is the most common type of agreement in principle. Whether you’re a first-time buyer or moving to a new home, a residential AIP gives you a clear idea of your borrowing power based on your income, outgoings, and credit profile. It’s especially useful when house hunting, as it shows estate agents you’re ready to proceed.
2. Buy-to-Let Mortgage AIP
If you’re buying a property to rent out, a Buy-to-Let AIP shows lenders have assessed your financial situation and consider you a viable investor. This is particularly important in competitive rental markets or when purchasing with speed is essential.
3. Shared Ownership Mortgage AIP
For those purchasing through a Shared Ownership scheme, many housing associations require an AIP before you can reserve a property. It also applies when increasing your share in an existing Shared Ownership property (known as staircasing).
How to Get a Mortgage Agreement in Principle
You can apply for an AIP either directly through a lender or via a mortgage broker. Using a broker can be beneficial—they often have access to a wider range of lenders and can help you find deals that suit your specific circumstances.
You’ll typically need to provide:
Photographic ID (e.g. passport or driving licence)
Proof of income (payslips, tax returns, or accounts)
Details of monthly outgoings (including any loans or credit cards)
Your address history for the past 3 years
Will There Be a Credit Check?
Yes—most lenders will carry out either:
A soft credit check, which doesn’t affect your credit score
Or a hard credit check, which may leave a mark on your file
Always check which type of search the lender will use before submitting an application.
When Should You Get an Agreement in Principle?
The best time to get a mortgage AIP is just before you start viewing properties. It ensures you know what you can afford and makes your offers more credible to sellers and agents.
How Long Does an AIP Last?
Most agreements in principle are valid for 60 to 90 days, although some may expire after just 30. If your circumstances change or your AIP expires, you can usually request a new one with updated information.
AIP vs. Full Mortgage Offer – What’s the Difference?
Agreement in Principle
Mortgage Offer
Early estimate based on basic information
Formal offer after full underwriting
Not legally binding
Legally binding, subject to conditions
Used to support offers
Required to complete the purchase
Can You Be Refused an Agreement in Principle?
Yes—reasons may include:
A low credit score
Inconsistent income or high debt
Incorrect or incomplete application information
If your application is declined, ask the lender for feedback so you can address any issues before applying again.
Does Having an AIP Guarantee a Mortgage?
No—an AIP is not a guarantee. Your full application will undergo a more detailed review, including a property valuation and additional credit and affordability checks. However, an AIP shows you’re on the right track and increases your chances of a smooth application process.
Do You Need an AIP to Make an Offer?
Not always—but in many cases, estate agents will expect one, especially if multiple buyers are interested in a property. Having an AIP in place can:
Show you’re serious about buying
Speed up the transaction
Give you more negotiating power
Need Help Getting a Mortgage Agreement in Principle?
Our partners at Bournemouth Mortgages make the process of getting an agreement in principle fast, simple, and stress-free.
Whether you’re a first-time buyer, home mover, or property investor, Bournemouth Mortgages expert mortgage advisers can guide you through every step—from your initial AIP to securing the best possible mortgage deal for your situation.
✅ Access to a wide range of lenders ✅ Tailored advice for your circumstances ✅ Quick turnaround on mortgage AIPs
Ready to Get Started?
Contact Bournemouth Mortgages today and take the first step towards owning your new home.
Your home may be repossessed if you do not keep up repayments on your mortgage.
James has lived in the Poole & Bournemouth area for over 25 years and has an extensive knowledge of the conurbation. He started his career in the property industry in 2015 following his graduation from the University of Kent, Canterbury and has worked in a variety of different roles in this time. Formerly a Sales Manager, he brings an in-depth understanding of the industry to his current role as Marketing Manager at Martin & Co.
