Mortgage Agreement in Principle Explained

AIP, MIP, DIP — three names for the same thing

The mortgage industry uses three different names for the same document, which creates unnecessary confusion for first-time buyers. All three refer to the same pre-application credit assessment.

The document you receive may say any of these three things depending on which lender or broker produces it. The content, purpose, and weight are identical. If an estate agent asks for proof of your AIP and you have a document labelled "MIP" or "DIP", it serves exactly the same purpose.

What an AIP is — and what it is not

An AIP is the starting block, not the finish line. It confirms a lender would consider your application — not that they have approved it.

How to get a mortgage agreement in principle

1. 1
   Decide: direct to lender, or via a broker?

   You can apply for an AIP directly with a lender online (most offer this in 15–20 minutes) or through a whole-of-market mortgage broker. A broker is strongly recommended: they compare dozens of lenders, run a single soft check, and identify the best product for your income and deposit before you commit to any lender's application process. Going direct to one lender means seeing only that lender's products — potentially missing a significantly better rate elsewhere.

2. 2
   Provide basic financial information

   The AIP application asks for: your name and date of birth, current address (and previous address if you have lived there under three years), employment status, gross annual income, any additional income sources (bonus, overtime, rental income), monthly financial commitments (existing loan payments, credit card minimums, car finance), and the approximate amount you want to borrow. No documents are required at this stage — income is self-declared.

3. 3
   Credit check is performed

   The lender or broker runs a credit check — most use a soft check for AIPs, which has no impact on your credit score and is not visible to other lenders. A small number of lenders still use a hard check at AIP stage. Always ask which type of check will be performed before proceeding. If it is a hard check, consider using a broker instead, who can run a single soft assessment across multiple lenders.

4. 4
   Receive your AIP document

   If the preliminary assessment is positive, the lender issues an AIP document — typically a PDF or printable certificate — stating the maximum amount they would be willing to lend. This is usually received within minutes of submitting the online application. Some lenders issue it immediately; others take up to 24 hours. The document typically shows the lender name, the maximum loan amount, and the expiry date.

5. 5
   Use your AIP when making offers

   When making an offer on a property, the estate agent will typically ask for evidence of your AIP. Send them a copy of the document or forward the email confirmation. Most agents simply need confirmation that you have one — some will ask for the lender's name and the approved amount to verify it is sufficient for the purchase price. The AIP gives the seller confidence you are a financially credible buyer.

Soft vs hard credit check — does an AIP hurt your credit score?

This is the question most buyers ask first about AIPs, and the answer depends on which type of credit check the lender performs.

How long does an AIP last — and what to do when it expires

Most AIPs are valid for 60 to 90 days from the date of issue. After this period the document expires and, if you still have not had an offer accepted, you will need to renew it before most estate agents will accept it.

Renewing an AIP

Renewing an AIP is straightforward. With a broker, you typically contact them to confirm your financial details have not changed significantly and they rerun the assessment. With a direct lender, you resubmit the online form. The renewal process is usually as quick as the original application — 15–30 minutes. If your circumstances have changed since the original AIP (new job, changed income, new credit commitment), update those details during renewal so the new document accurately reflects your current position.

How many times can you renew?

There is no limit on the number of times you can renew an AIP. If you are searching for a property over an extended period, renew as often as needed. The only consideration is that each renewal involves another credit check (soft or hard, depending on the lender). Soft checks have no impact regardless of frequency; multiple hard checks in a short period are worth avoiding where possible.

Does an expired AIP affect your application?

No — an expired AIP simply means you need a fresh one before using it with an estate agent. It does not indicate a problem with your finances, and the new AIP will be based on your current financial position at the time of renewal.

What lenders assess at the AIP stage

The AIP is a lightweight preliminary assessment compared to the full mortgage application. The lender is primarily checking two things: whether your income is likely sufficient for the amount you want to borrow, and whether your credit history raises any immediate concerns.

What is assessed at AIP stage

• Income multiple check — whether your stated income is sufficient to support the requested loan at the lender's standard income multiple (typically 4–4.5×)
• Basic credit assessment — credit score, any CCJs (County Court Judgements), defaults, or missed payments on your credit file
• Existing financial commitments — declared monthly outgoings including existing loan payments, credit card minimums, car finance
• Identity verification — name, date of birth, address history

What is NOT assessed at AIP stage

• Income verification — payslips, P60s, bank statements are not reviewed until full application
• Property-specific assessment — no valuation or survey is involved
• Detailed affordability stress test — the full lender stress test (at higher rate) runs at full application
• Self-employment accounts — HMRC-verified tax returns are only requested at full application

This is precisely why an AIP can be issued and then a full application later declined — the detailed verification that the AIP does not require can reveal discrepancies or issues not visible in the initial assessment.

Why full applications are declined despite an AIP

Receiving an AIP does not guarantee your full mortgage application will be approved. The most common reasons a full application is declined after an AIP was issued include:

• Income cannot be verified at the stated level. Self-employed income declared at AIP stage may not be supported by the last two years of accounts. Employed income with large bonus components may be discounted. Declared overtime or commission that cannot be evidenced over a sustained period may not be counted.
• Property does not value at the agreed purchase price. If the lender's valuer assesses the property at less than the purchase price, the loan-to-value changes. A property purchased at £280,000 that values at £260,000 means the LTV is worse than planned — the lender may reduce the offer or require a larger deposit.
• Undisclosed financial commitments. Credit commitments that were not declared at AIP stage but appear on bank statements at full application — a car finance payment, a subscription service, an undisclosed loan — can reduce the lender's affordability calculation below the required threshold.
• Credit issues that the soft check did not reveal. Some soft checks do not surface all data that appears on a full hard search. Newer missed payments or defaults may not have appeared on the AIP soft check but appear on the full application hard check.
• Change in circumstances between AIP and application. A job change, reduction in hours, or new financial commitment between obtaining the AIP and submitting the full application can alter the affordability picture.

When should you get a mortgage agreement in principle?

Get an AIP before you start viewing properties — not after you have found one you want to buy. There are four reasons this order matters:

• It confirms your actual budget. Many buyers believe they can borrow more than lenders will actually offer. An AIP gives you a definitive maximum loan amount, so your viewing budget is based on what you can borrow — not what you think you can borrow.
• Estate agents require it. Most reputable estate agents will ask for AIP evidence before booking viewings or certainly before submitting an offer to a vendor. Arriving at an offer stage without one wastes time and may cost you the property.
• Speed advantage on competitive properties. In a competitive market, having an AIP ready means you can make an offer immediately after viewing. Buyers who need to obtain an AIP after finding a property lose days — sometimes enough for another buyer to move first.
• It identifies credit problems early. If your AIP is declined, you learn about any credit issues before you have invested time, survey costs, and emotional energy in a specific property. Early discovery gives you time to address problems before they derail a purchase.

Frequently asked questions

• What is the difference between an agreement in principle and a mortgage offer?
  An AIP is a preliminary, non-binding indication that a lender would consider lending you a stated amount, based on self-declared income and a basic credit check. A formal mortgage offer is a legally binding commitment from the lender to provide the mortgage on stated terms, issued after full verification of income documents, a property valuation, and a detailed affordability assessment. Never exchange contracts based on an AIP — always wait for the formal mortgage offer.
• Does getting an agreement in principle affect your credit score?
  Only if the lender uses a hard credit check, which leaves a visible mark on your credit file. Most lenders now use a soft credit check for AIPs, which has zero impact on your credit score and is not visible to other lenders. Always ask which type of check applies before proceeding. Using a whole-of-market broker typically involves a single soft check rather than multiple lender applications.
• How long does it take to get an agreement in principle?
  Most online AIP applications take 15–30 minutes to complete and produce an instant decision. Some lenders take up to 24 hours. Through a broker the process is similar — provide your details in one conversation and the broker obtains the AIP on your behalf. The document is typically issued as a downloadable PDF or email confirmation.
• Can I get more than one agreement in principle?
  Yes — there is no rule preventing you from obtaining AIPs from multiple lenders. If each uses a soft check (most do), there is no credit score impact regardless of how many you obtain. If any lender uses a hard check, multiple hard searches in quick succession are worth avoiding. A whole-of-market broker effectively covers the market with a single assessment, making multiple individual applications unnecessary.
• Do I need an agreement in principle to make an offer on a house?
  Technically no — there is no legal requirement for an AIP to make an offer. In practice, most estate agents will not submit an offer to a vendor without evidence of an AIP. Even where agents do submit unverified offers, vendors almost always favour buyers who have confirmed their financing over those who have not. Getting an AIP before viewing is strongly recommended.
• My AIP was declined — what does that mean?
  An AIP decline typically means the lender identified a concern at the preliminary stage: income insufficient for the amount requested, a credit issue (missed payments, CCJs, defaults), or the requested LTV being outside the lender's criteria. A decline from one lender does not mean all lenders will decline — different lenders have different criteria. A whole-of-market broker can identify which lenders are most likely to approve your specific profile and advise on steps to improve your position if needed.

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