An agreement in principle (AIP) — also known as a mortgage in principle, decision in principle, or DIP — is a conditional statement from a mortgage lender indicating that they would be willing to lend you up to a certain amount, based on an initial assessment of your income and credit profile.
What it is
An AIP is based on the information you provide at the time of application — typically your income, outgoings, deposit, and employment status. The lender runs a credit check (soft or hard, depending on the lender) and returns a conditional maximum lending amount.
What it is not
An AIP is not a mortgage offer. It does not guarantee that you will receive that amount. When you later apply for a full mortgage on a specific property, the lender will:
- Verify all the information you provided
- Instruct a valuation of the property
- Conduct full underwriting
Any of these steps can result in a different offer — or no offer at all.
Soft vs hard credit check
- Soft search: The check is invisible to other lenders. Multiple soft-search AIPs won't harm your credit score.
- Hard search: Recorded on your credit file and visible to other lenders. Multiple hard searches in a short period can reduce your credit score.
Most major lenders now use soft searches for an AIP. Check before applying.
How long it lasts
Usually 30–90 days. You can renew it if it expires before you find a property.
This glossary entry is for general information. Always consult a qualified mortgage adviser before making financial decisions.