Finance glossary
Agreement in Principle — AIP
Also known as: Decision in Principle, DIP, Mortgage in principle
In simple terms
An agreement in principle (AIP) is a lender’s early indication of how much it might be willing to lend you, based on a quick check of your finances. It is not a full mortgage offer, but it shows sellers you are a serious buyer.
On this page
What does agreement in principle mean?
An agreement in principle — also called a decision in principle (DIP) or mortgage in principle — is a lender’s provisional estimate of how much it could lend you. It is based on basic details about your income, outgoings and a check of your credit record.
It is not a guarantee and not the same as a mortgage offer. It signals that, on the information given, the lender would be likely to lend — subject to a full application, valuation and checks later on.
How an agreement in principle works
You give the lender or broker some key figures and they run an initial assessment, often using a soft credit search that does not affect your credit file. If it looks positive, you get a document confirming an indicative amount, usually valid for a set period such as 30 to 90 days.
When you find a property, you convert it into a full application. The lender then verifies everything — payslips, bank statements, a property valuation — and only then issues a binding mortgage offer, which can differ from the AIP figure.
How could this affect me?
An AIP is useful when house-hunting: estate agents and sellers often want to see one before taking an offer seriously, and it gives you a realistic budget to search within.
Because it is only indicative, do not treat it as money in the bank. Big changes to your finances, a low property valuation, or fuller checks can all mean the final offer is less than the AIP — or is declined.
Things to watch out for
- An AIP is not a mortgage offer — the full application can still be declined or come in lower.
- Check whether the lender uses a soft or hard search; repeated hard searches can affect your credit file.
- It has an expiry date, so time it for when you are genuinely ready to look and buy.
- Do not take on new credit or change jobs between the AIP and the full offer if you can avoid it — it can change the decision.
General information, not personal advice
Consumer Credit is an independent information service. We do not provide regulated financial advice or sell financial products. For advice on your own situation, speak to an appropriately authorised firm or a free service such as MoneyHelper. About Consumer Credit.
Sources
We checked this page against these official and authoritative sources.
- MoneyHelper, What is a mortgage in principle? (opens in a new tab). Accessed 22 Aug 2026.
- GOV.UK, Buying a home: getting a mortgage (opens in a new tab). Accessed 22 Aug 2026.