Agreement in Principle
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Miles Robinson
Job Title: Director & Advising Principal
Agreement in Principle (Part 1)
Miles Robinson gives us a guide to an Agreement in Principle.
Podcast approved by The Openwork Partnership on 14/01/2026.
What is an Agreement in Principle?
An Agreement in Principle is effectively an early indication from a mortgage lender of how much they will be willing to lend. It’s based on initial information we’ve provided to them – normally details about your income, credit commitments and outgoings, plus a soft credit check.
It’s also known as a Decision in Principle, a Mortgage in Principle or a Mortgage Promise – they are all the same thing. It is not a formal mortgage offer and it’s not legally binding.
What should I do if my estate agent is asking to see my Agreement in Principle? How do I get one?
An estate agent quite often wants something directly from a lender to show that you can afford a mortgage on the property, combined with a deposit. They may allow you to view a property if you verbally confirm you can afford it, but normally when you come to make an offer they want to see a hard copy of the Agreement in Principle.
Clearly, the estate agent has a duty to their vendor to confirm you can afford to buy. Some lenders don’t actually produce a hard copy of an Agreement in Principle. In that case, an email from us as advisers will reassure the estate agent that you can borrow at that level.
Do I have to have an Agreement in Principle through the estate agents I’m looking to purchase through?
No, you’re absolutely not obliged to use the estate agent’s mortgage adviser. You’re free to use your own broker or bank. The estate agent merely has a duty to ensure you have the funds, plus they have anti-money laundering processes to evidence where the money is coming from to purchase that property.
But sometimes an estate agent uses the Agreement in Principle as an angle to get you to speak to their advisers. You’re not obliged to do that. You can use any adviser you like and if they need any further information, they can speak to us.
It can also happen with developers and housing associations, if you’re buying on shared ownership. They may insist that you speak to their adviser to qualify you as a customer.
Quite often that’s just a hurdle and you may need to go through the process, tick the boxes and then come back to us.
If someone has gone direct to a bank for an Agreement in Principle, there can be a genuine need for advice – that’s clearly a service that an agent can offer, but there certainly shouldn’t be any obligation.
How reliable is an Agreement in Principle (AIP) and how long does it last?
It normally lasts 30, 60 or 90 days, depending on the lender. It’s generally about when the soft credit check expires, which varies.
An AIP is a useful indication. It’s not a guarantee or an offer. We’ve not sent any income documents or bank statements, so it’s still subject to underwriting. And although the estate agent wants to see that AIP, sometimes it’s not really worth the paper it’s written on.
A customer could simply tell a lender or adviser what they earned, without showing any evidence. If that number is incorrect, it would fall down at full mortgage application.
My advice is to speak to an adviser, let them look at your credit report, your income documents, your credit commitments and then run an affordability calculation. Make sure they are aware if you’re on a contract or you’re self-employed – any little nuances.
An adviser will make sure your whole case fits, so when you submit the full application we’re not going to get an unnecessary rejection. So an Agreement in Principle is useful, but clearly the full application is what’s most important.
Can I make an offer with an Agreement in Principle?
Yes – and most estate agents will expect you to have an Agreement in Principle or a note from an adviser if you plan to buy with a mortgage.
Put yourself in the vendor’s shoes. If somebody’s making an offer on your house, you’re paying fees to the estate agent to make sure that person’s a good buyer, with finance in place. You’d want to know whether they’re in a property chain or not.
So, the agent would normally want an Agreement in Principle to confirm you have a mortgage ready to go.
Does an Agreement in Principle mean you’ll get a mortgage?
No, it’s just an early indication. Final approval depends on full underwriting, the property valuation and affordability checks, at which point the lender may want bank statements and evidence of your deposit.
An AIP is more about income validation than underwriting. They look at your payslip, multiply it by 12 and that’s the income. But their scoring systems are very advanced and run other risk checks on you as a buyer as part of the credit approval process.
The uncontrollable part is the property valuation. If there are structural issues, for example, lenders might want further reports. So getting an Agreement in Principle is something to be happy about, but it’s not time to celebrate. It just allows you to make an offer.
If you’ve got an adviser that’s done the research around your criteria and affordability and assessed your documents, you should get a mortgage. We always choose a lender where you meet all their policies, procedures and affordability checks.
Are you an expert in applying for your own mortgage? Probably not. So rather than apply direct with a lender, get an expert to guide you through.
Will I need a credit check? Does an AIP affect credit score?
Most lenders now run a soft credit check. I’ve been doing this job for nearly 20 years, and in the early years of my role, most lenders didn’t even provide an Agreement in Principle.
The credit check was just done at the point of the full application.
The Agreement in Principle concept came in around 2010 to 2012, as an early stage credit decision, and a lot of them were hard checks. But now lenders tend to use a soft check.
A soft credit check doesn’t impact your credit score. When you log into your credit system, you can see the check, but nobody else can. A hard credit check leaves a footprint on your credit report, and lots of those can degrade your credit score. It also means other firms can see that a credit check has been done.
How do I apply for an Agreement in Principle? How long does this take?
Most AIPs are instant – it’s just about how quickly we can type the customer’s information into the system.
We have half a dozen lenders that are integrated with our system. When we capture your information as part of the fact-find, we can click a button and send that to a lender for an instant decision.
It often takes just minutes, and if not, we get a response the same day. Very rarely it can be referred, which means the lender wants a human to look at it before they say yes or no.
You’ve demonstrated how a mortgage broker can help with an Agreement in Principle. Is there anything else we need to know?
A final point is that an Agreement in Principle is, just as it says, in principle. We might get something approved with a particular lender. A few weeks go by, you find a property and when we reassess the market, another lender is more suitable based on the rate or cost. It isn’t set in stone.
The AIP merely gives you confidence to make an offer on a property. As advisers, once you’ve had that offer accepted, we look again at the market to check the right lender for you before we process the full application.
Key Takeaways:
- An Agreement in Principle (AIP), also known as a Decision in Principle, Mortgage in Principle, or Mortgage Promise, is an early indication from a mortgage lender of how much they are willing to lend, based on initial information.
- An AIP is not a formal mortgage offer and is not legally binding. It is still subject to full underwriting, income document checks, and a property valuation.
- Most lenders now use a soft credit check to generate an AIP, which does not impact your credit score. A hard credit check, which can degrade your score, is typically done at the point of the full mortgage application.
- Estate agents typically require a copy of an AIP (or an email from an adviser) before you make an offer on a property to confirm you can afford the mortgage and have funds in place. You are not obliged to use their in-house mortgage adviser.
- It is highly advisable to speak to a mortgage adviser before submitting a full application; they can check your full credit report, income documents, and affordability to ensure your case fits the lender’s criteria and help avoid unnecessary rejection later in the process.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Approved by The Openwork Partnership on 14/01/2026.
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Meet the Author
Miles Robinson
Job Title: Director & Advising Principal
Agreement in Principle (Part 2)
Miles Robinson continues the conversation about an Agreement in Principle. Episode two of two, recorded in March 2026.
Podcast approved by The Openwork Partnership on 19/03/2026.
When should I get an Agreement in Principle?
Ideally, the best time to get an Agreement in Principle is before viewing properties – to get an indication of your borrowing capability.
When you’re actively looking to view – or certainly making an offer – estate agents will want to ensure you’ve got your funds in place. If you’re a cash buyer, that’s straightforward – it might just be a bank statement. But if you’ll be taking on a mortgage, they’ll want to know you’ve got a deposit and approval in principle for that mortgage.
It can be called different things: an Agreement in Principle (AIP) or a Decision in Principle (DIP), but essentially it’s a statement from a mortgage lender of what you can afford to borrow based on your income.
A few months before you start to actively look for a home, have a chat with an advisor and get your Decision in Principle. We’ll make sure you’re on track – and get you that piece of paper to show an agent you’re ready to make an offer.
What information do I need to get an Agreement in Principle?
Typically, it’s a soft credit check. We would need full names, including middle names, dates of birth and three years’ address history. Ideally, you’ll be registered on the electoral roll at the address where all your credit is held.
We need employment details – are you employed or self-employed, and is it a permanent job or temporary? What is your basic salary, and is there overtime? We look at your monthly commitments, credit card balances, loans and childcare commitments, plus how much deposit you have.
We normally get some income verification on file, even though lenders don’t ask for that at this stage. It could be payslips if you’re employed, showing any overtime, bonus or commission. If we can evidence your basic salary, there will be no surprises when we come to make the full application.
If you’re self-employed, getting the numbers right can be a bit tricky. It could be salary and dividends or net profit for a sole trader. We tend to ask for SA302 documents, as these show your income and what you’ve declared as tax.
This way, we can make sure that your Agreement in Principle actually has merit. It’s not just what you think your income is – it’s the actual, proven income.
How is affordability calculated for an Agreement in Principle?
Historically, your annual income was simply multiplied three or four times to calculate the mortgage. Today, with house prices increasing, interest rates coming down and other factors, that can go up to four or five times your income. Some lenders now even go up to six times.
The calculation could be based on basic salary, overtime, bonus and allowances. Lenders then look at your loans, credit cards, student loans etc., and factor those in. Household expenditure is predicted based on the property value and your income.
Depending on the lender, they might then apply an interest rate as a stress test. All of that goes into a big algorithm to give a maximum lending figure.
Is an Agreement in Principle guaranteed? Can my mortgage be declined after an Agreement in Principle?
An Agreement in Principle is not a guarantee of a mortgage at all. It’s essentially a soft credit check. Some lenders do a hard credit check, but either way, when you apply for the full mortgage, it will be subject to underwriting.
They may request bank statements at that point, and look at the conduct on your accounts. Much more goes into the full underwriting of a case for formal mortgage approval.
An Agreement in Principle is literally an intention to lend. The benefit of using an advisor is that we get a very strong understanding of your case, so that we’re likely to get approval once we reach full application.
If you’re doing this on your own at home, typing in what you think is correct, an AIP will still come through. But is the lender going to review everything the same way as you at full application? That’s where an advisor adds value.
Can I get an Agreement in Principle if I’m a first-time buyer?
I’d absolutely recommend it. Once you’ve owned a property and you’ve got a mortgage, your credit history is usually good, as you’ve got more experience with borrowing.
It’s clearly more important for a first-time buyer. You want to make sure there are no surprises on your credit file. It’s a key thing to do before you get excited and start viewing houses. Make sure you speak to an advisor and get that piece of paper.
How will bad credit affect an Agreement in Principle?
It can have an impact, so it’s something to be really mindful of. Perhaps you’re aware that you’ve got some credit issues – a missed payment, a county court judgment (CCJ), or a default, for example.
It comes down to how long ago it happened, and whether it’s satisfied so that the payments are now up to date. The smaller it is and the longer ago it happened, the better your chance of being approved.
Most mainstream lenders now use an automated credit scoring system. We put all the information in and the algorithms have set policies. If it’s a default of £500 from a year ago, it’s probably just going to decline.
If any adverse credit is showing on your report, get an advisor to assess that. We look at lenders’ policies to see which will or won’t allow your situation before running any credit checks.
We’ll recommend the right lender for your Agreement in Principle, rather than just chancing it with a high street lender and being disappointed when it fails.
Is it harder to get an Agreement in Principle if I’m self-employed?
It’s not harder, we just need more detail. Lenders typically want one to two years’ trading history, with SA302s. It’s important that we’re working with the correct numbers.
Quite often the self-employed might be paying themselves a certain monthly income out of their business, but the income they’re declaring to HMRC tax isn’t the same. We need to see those documents to ensure we’re working with the figures lenders will use.
Advisors should be asking the right questions here – if not, they’re probably not the right advisor. Asking for documents and information gives you a signal that this advisor is not just accepting the numbers you’re telling them. Good advisors work on hard facts.
I’ve been declined an Agreement in Principle. What are the next steps?
Don’t panic. There can be a number of reasons why it has declined. It could just be a keying error, especially if you’ve done it yourself. As advisors, we would go back and make sure we put everything in correctly. If not, we’d amend it and it could go through.
The second step is to see if there’s something we’re not aware of. Perhaps you changed address and an unpaid energy bill ended up in default, or you switched mobile phone contracts and missed a payment. We see these things often.
The smallest default I’ve seen was £11 – but things you think are minuscule can still impact you. Usually we can find another lender to accept that, because their criteria vary a lot. It’s all about understanding the situation and finding a solution.
Perhaps you forgot you had £2,000 on a 0% credit card. The lender system’s taken that into account for affordability and given you a lower loan than we expected.
We go through the steps – checking if the information is correct, getting a download of your credit report, double-checking the income and matching everything up. We’ll look into all the alternatives for you.
What are the benefits of getting an Agreement in Principle with a mortgage broker?
You could either get an AIP with a broker or through your bank. But when going direct, you’re only accessing that lender’s criteria, and it’s down to you to interpret that. If they decline you, you’ve used up a soft or hard credit check, which can impact your credit history.
Also, if it fails, you probably won’t know why. You’re on your own and it’s difficult to talk to a bank advisor to understand the details. Their work is often done through online systems.
With us, we’ll complete a full fact-find and run a soft credit check. We’ll get a full understanding of your income and how a lender will interpret that. We get hard facts from your documents to make sure we’re working with the right information.
That generally means you can be more confident of being mortgage-ready. It’s not just about having a piece of paper to say you’ve passed a soft credit check and can borrow a certain amount.
With an advisor, you get a full service with advice and an assessment of what you can borrow. That way, your AIP will ultimately turn into a successful mortgage application.
Key Takeaways:
- It is best to obtain an Agreement in Principle (AIP), also called a Decision in Principle (DIP), a few months before you actively start looking for a home and certainly before viewing properties or making an offer, as estate agents will require proof of your borrowing capability.
- The initial process usually involves a soft credit check and requires details such as full name, three years’ address history, employment information (salary and permanence), deposit amount, and a review of all monthly financial commitments like loans and credit card balances.
- Affordability calculations have moved beyond simple income multipliers and now use a complex algorithm that can lend up to six times your income, factoring in basic salary, overtime, bonuses, existing debts, predicted household expenditure, and often a stress test using a hypothetical interest rate.
- An AIP is merely an intention to lend and is not a guarantee of a mortgage; the full application is subject to rigorous underwriting, which includes a more thorough review of your financial conduct and may involve hard credit checks and bank statement requests.
- Working with a mortgage broker is beneficial because they complete a full fact-find and check against multiple lenders’ criteria to ensure your AIP has merit, significantly increasing the confidence that the AIP will turn into a successful full mortgage application.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Approved by The Openwork Partnership on 19/03/2026.
Published/recorded 04/26.
