What is a mortgage in principle?

A mortgage in principle (MIP) – also called an agreement in principle (AIP) or decision in principle – is essentially a lender’s way of saying “yes, we’d probably lend you this much to purchase a property”.

Think of it as a conditional thumbs up. The lender takes a quick look at your income, outgoings, and credit score, then gives you an estimate of how much they’d be willing to lend you. It’s not a guarantee, and you’ll still need to go through a full mortgage application later, but it’s a strong indication of what you could borrow.

Whilst you don’t legally need a mortgage in principle to buy a house, you could miss out by not getting one. It’s pretty much essential in today’s property market.

Estate agents prefer it.

While most agents will still show you properties without an MIP, having one makes the process smoother. Some agents might ask about your budget or mortgage approval status before booking viewings for expensive properties, but it's more about managing expectations than refusing to help.

Sellers take you seriously.

When you make an offer, having a MIP shows you’ve done your research and are ready to buy. Sellers are more likely to accept an offer from a buyer who can prove they’re financially ready to proceed.

You’ll know a realistic budget.

That dream house might look perfect online, but if it’s £50,000 over what you can borrow, you’re setting yourself up for disappointment. A MIP gives you clear boundaries for your property search giving you to have a much better understanding of what you can afford.

Getting a mortgage in principle nowadays is pretty straightforward – most lenders can give you one in minutes, here’s how to get one:

Online applications are the quickest

Most major lenders have online tools that take about 10 minutes to complete and get you your MIP almost instantly. You’ll just need to provide some basic details like your income, monthly outgoings, employment status, and deposit amount.

Mortgage brokers can shop around for you

If you’re not sure which lender to approach or need some support, a mortgage broker can do the legwork for you. They’ll try to find the best deals for your situation. They will often have access to exclusive rates you can’t get directly from lender, and they handle all the paperwork. Just keep in mind that some may charge fees, whilst others get commission from lenders.

You can apply directly with your bank

Many people start with their own bank because it feels familiar, convenient, and you may even get a special rate for being their customer. The application might be slightly quicker since they already have your account history, but remember to shop around – you might be able to find a better deal elsewhere.