How to apply for a mortgage in principle

To be sure that you can borrow the amount of money you're likely to need to buy a property, you can apply for a mortgage in principle. We looked at what you need to be prepared for to get your agreement in principle right first time.

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Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.

Before you start house hunting, there are a number of things to consider and knowing what you can afford is key. To be sure that you can borrow the amount of money you're likely to need to buy a property, you can apply for a mortgage in principle. In this guide, we look at why you might get a mortgage agreement in principle (AIP) and how to get your agreement in principle right the first time.

What is a mortgage in principle?

A mortgage agreement in principle allows you to find out how much money you can borrow to buy or remortgage a property. The purpose of a mortgage in principle is to show that you can, in theory, borrow a certain amount from a lender. This can help in the process of house hunting, especially as some estate agents will insist that you have an agreement in principle before allowing you to view properties.

Keep in mind that when you get a mortgage in principle, there is no commitment from the lender that they will offer you the same mortgage - the agreement in principle doesn’t constitute a mortgage promise. It is simply an indication of how much you could borrow and you will still need to go through the mortgage application process for an official mortgage offer.

How to get a mortgage in principle

Getting a mortgage in principle is relatively simple and requires just a few key pieces of information about your personal circumstances. You will likely need to provide:

  • Your name and date of birth

  • Three years of address history

  • Your income

  • Your monthly expenses

You will not need to provide evidence or supporting documentation at this stage, however, you will need to do so if and when you apply for a mortgage.

How long does it take to get a mortgage in principle?

You can often get a mortgage in principle in less than an hour, once you have all the information required at your fingertips. Many lenders will allow you to apply for a mortgage in principle online, providing you have some key information available.

Before getting a mortgage in principle, you will need to gather some initial details about your income and expenses, along with basic personal details. Although you are unlikely to need the full documentation required for a mortgage application, it can be helpful to be prepared with paperwork ahead of time.

How long is your agreement in principle valid for?

Once you have the agreement in principle, it is usually valid for around 90 days, or three months. This can give you an idea of what you may be able to afford, and enough time to look at available properties in your price range. 

If it takes you a while to find a property you want to buy, then you may find that the interest rates have changed from when the mortgage in principle was provided, or there may be different mortgage deals on the market.

If you do decide to apply for a mortgage, your lender may be able to use the information provided to take out the mortgage agreement in principle, however they will still need to update your details and check that your personal circumstances have not changed.

Does applying for a mortgage agreement in principle affect your credit score?

Whether or not your mortgage in principle affects your credit record will depend on whether the lender providing your agreement in principle runs a hard or soft credit check. It is important to know ahead of applying for the mortgage in principle which type of credit search the lender uses, as hard credit checks will leave a footprint on your credit file. 

Carrying out a high number of hard credit searches in a short period of time can negatively affect your credit score and impact your chances of acceptance when you make a full mortgage application.

Does it cost anything to get a mortgage in principle?

Typically, mortgage agreements in principle are free of cost, but certain mortgage brokers may charge a fee so check before you request an AIP.

How to apply for a mortgage

If you have an idea of how much you can borrow and you’re ready to apply for a mortgage, you need to first find the deal that you want to go for. To do this effectively, you should compare the range of deals on the market. You can do this by visiting our mortgage comparison table.

Remember to check the overall cost of borrowing, do not just be led by the cheapest rate, as there are additional charges to consider, including set up costs and exit fees.

You should take into account:

  • The interest rate and how long it applies

  • The type of rate: fixed rate, discounted, or variable rate

  • What the rate reverts to at the end of the 'deal' term

  • Any overhanging penalties from extended tie-in terms

  • Arrangement fees

  • Redemption fees

  • Whether fees will be added to your mortgage — you will pay interest on them if so

  • Eligibility criteria

While this list may not be exhaustive, it gives a good idea of the kind of areas you need to consider.

Here is how to choose the right kind of mortgage

If you're a first time buyer or looking to move house or remortgage, we can help you find the best mortgage deal to suit your needs.