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Mortgage Agreement in Principle (AIP) explained (UK): what it is and what lenders check

An AIP (Agreement in Principle) is a lender’s initial borrowing estimate. Learn what it is, what’s checked, and see worked examples.

Published: 20/03/2026 • Last verified: 20/03/2026

Summary

An Agreement in Principle (AIP) (also called a Decision in Principle or Mortgage in Principle) is a lender’s early indication of how much you might be able to borrow, based on the information you provide.

It’s useful because it can:

  • help you set a realistic budget,
  • show estate agents/sellers you’re serious,
  • and highlight issues early (for example, credit file problems).

But an AIP is not the same as a full mortgage offer — the lender still needs to do a deeper affordability assessment and valuation checks later.

If you want to sanity‑check numbers while you read:

This guide is general information only. Lenders’ checks and processes vary.

Key terms (quick definitions)

  • AIP / DIP: an initial borrowing estimate, not a final offer. /glossary/aip/
  • Affordability: whether the repayments look manageable based on income and outgoings.
  • Credit check: lenders may use either a “soft” or “hard” search depending on policy.
  • Mortgage offer: the formal offer after full underwriting and property checks.

How it works

Most AIP processes follow a similar shape:

  1. You provide details (income, outgoings, debts, deposit, household situation).
  2. The lender runs an initial affordability check using their model.
  3. The lender may run a credit check (type varies).
  4. You receive an AIP amount (often with an expiry window).

What lenders typically check for an AIP

Although every lender is different, AIP checks often include:

  • Income (salary, self‑employment income, benefits where relevant)
  • Regular outgoings (credit commitments, childcare, utilities, travel, etc.)
  • Existing debts (loans, credit cards)
  • Deposit size (which affects LTV and available products)
  • Credit file (missed payments, defaults, total credit usage)

Some lenders will also ask for broad information on:

  • your employment type (employed / self‑employed),
  • whether you’re buying alone or jointly,
  • and whether you have dependants.

Soft vs hard credit checks (why it matters)

Lenders differ on whether an AIP uses a soft or hard credit search. If you’re worried about multiple AIPs, check the lender’s wording before you apply.

AIP vs mortgage offer (the key difference)

An AIP is usually based on what you tell the lender. A mortgage offer comes after:

  • evidence checks (payslips, bank statements, accounts),
  • detailed affordability assessment,
  • and the lender’s valuation of the property.

Worked examples

These examples are illustrative to show how an AIP fits into the buying process.

Example 1: First-time buyer budgeting

  • You have a £25,000 deposit.
  • You want to understand a realistic price range.

An AIP can help you combine:

  • what you’ve saved (deposit),
  • and what you might be able to borrow,

so you’re not viewing homes that you can’t finance.

Example 2: Joint application

  • You’re buying with a partner.
  • One of you has a loan and childcare costs.

An AIP can highlight whether the combined income and outgoings still support the loan amount you need. It can also help you spot when a higher deposit (lower loan) would make the numbers work.

Example 3: Self-employed or variable income

If your income varies, lenders can assess it differently. An AIP can still be useful, but the final outcome often depends on how the lender verifies income during the full application (for example, using accounts or tax documents).

Common mistakes

  • Treating an AIP as guaranteed: it’s an early indication, not a final offer.
  • Using rough numbers: large under‑reported outgoings can change results later.
  • Assuming every AIP is a soft search: check before applying.
  • Forgetting that property matters: the lender can still decline based on valuation or property type.
  • Ignoring buying costs: deposit isn’t the only cash you need.
  • Letting the AIP “set” your budget: start from what feels affordable, not the maximum number.

What to do next

Related glossary:

Sources