Agreement in Principle (AIP)
An Agreement in Principle (AIP) is an initial lender indication of how much you might be able to borrow. It is not a mortgage offer.
Last verified: 10/03/2026
Definition
An Agreement in Principle (AIP) (sometimes called a “Decision in Principle”) is an early-stage check where a lender indicates the amount you might be able to borrow, based on the information you provide and some basic checks.
What an AIP is useful for
- showing you’ve started the mortgage process
- giving you a rough borrowing range for property searching
- helping estate agents understand you’re a serious buyer
What an AIP does not guarantee
An AIP is not a final mortgage offer. The lender can still decline or reduce the amount after:
- document verification
- full underwriting
- property valuation
- checks on the specific property type and condition
Practical tip
Use an AIP to guide your search, but plan with a buffer rather than shopping at the maximum figure.
Related terms
- LTV
- Mortgage affordability