Overview
An agreement in principle is an early indication of what a lender may be prepared to lend based on the information supplied. It helps you set a search budget and show an estate agent that you have begun checking finance.
It is one stage in an application process. The property, supporting documents and full underwriting still matter after the initial indication arrives.
Quick Answer (Read This First)
An agreement in principle, sometimes called a decision in principle or mortgage promise, is not a guaranteed mortgage offer. Check what information it uses, whether the lender conducts a soft or hard credit search and when the indication expires.
Halifax describes its AIP as an obligation-free indication of potential borrowing using a soft credit check. Nationwide also uses a soft search at this stage and says its decision in principle is valid for 90 days. Those are provider-specific terms. Halifax: agreements in principle; Nationwide: decision in principle.
Understand What the Figure Represents
The amount shown depends on the information entered and the lender's criteria. Income, deposit, borrowing commitments and household circumstances can all affect the assessment.
Use accurate figures and the lender's definitions. If a form asks for gross annual income, entering monthly take-home pay answers a different question. If bonus or overtime income varies, check how the lender wants it recorded rather than assuming all recent income will be accepted.
Keep a copy of the information supplied. If a later application produces a different borrowing figure, that record helps identify whether the change came from corrected details, evidence requirements or lending criteria.
Add the Deposit Without Spending the Moving Budget
An indicated mortgage amount is not your entire purchase budget, and the total savings balance is not necessarily all available as a deposit.
For illustration, suppose the AIP indicates £210,000 and you have £35,000 saved. Reserving £5,000 for transaction and moving costs leaves a £30,000 deposit, suggesting a £240,000 purchase budget before considering the property's acceptability and your own affordable spending limit.
Using all £35,000 as the deposit would leave no money from that pot for other costs. Work out those costs separately, including any tax that applies to your purchase circumstances, rather than treating the maximum theoretical price as a target.
If some of the deposit comes from family, disclose the arrangement. Our gifted deposit letter guide explains why repayment expectations and ownership conditions need to be clear.
Check the Credit Search Before Submitting
An AIP is not universally defined by one credit-search method. Read the named lender's disclosure for the actual service you are using.
Nationwide distinguishes its soft-search decision in principle from the formal credit check at full application. Halifax also describes a soft check for its own AIP. That does not justify assuming every lender or broker journey works identically.
If you are comparing options through a broker, ask what will be submitted and to whom. A discussion about affordability and a formal application are different steps; understanding the proposed action avoids unnecessary repeat submissions.
What Remains for the Full Application
| At the early indication stage | What may still need to happen |
|---|---|
| Income and commitments supplied | Documentary checks and underwriting |
| Deposit amount entered | Evidence of its source and availability |
| Indicative borrowing figure | Assessment of the particular property and valuation |
| Initial credit assessment | Further checks under the lender's full process |
Halifax's application guide explains the later application stages. The lender's decision involves the details of the actual transaction, rather than the initial borrowing indication alone. Halifax: applying for a mortgage.
A property valuation below the agreed price, for example, may affect the loan-to-value calculation and the amount available. Our low mortgage valuation guide explains the resulting choices.
Keep the AIP Current
Check the expiry date on your own confirmation. Nationwide's 90-day period is an example, not a universal lifespan. If your search takes longer, ask how to refresh the indication.
Report relevant changes such as a new job, reduced income or additional borrowing. An unexpired document does not make outdated information accurate.
If you are about to make an offer on a home, confirm your position with the lender or broker. In Scotland, the legal process differs from England and Wales; take your solicitor's advice before making a binding commitment. The AIP itself does not replace that advice.
If the Full Application Is Declined
Ask which issue caused the decline before applying elsewhere. A document mismatch, affordability decision and property problem require different responses.
Correct genuine errors and obtain advice about lenders whose criteria fit the circumstances. Repeating the same application without understanding the obstacle may reproduce the result. See mortgage affordability declines for the next steps.
Frequently Asked Questions
Read the mortgage process timeline or browse mortgage guides. This is general information; sources were checked on 9 September 2026.
