A Mortgage in Principle is a rough estimate from a lender of what you could afford to borrow.

Worth getting before you start searching, because it gives you a realistic budget and shows sellers and estate agents you're a serious buyer.

Is an MIP the same as a decision in principle?#

Yes. It goes by many names depending on who you ask — Mortgage Agreement in Principle, Mortgage Promise, Decision in Principle (DIP), Agreement or Approval in Principle (AIP).

They all mean the same thing: an official, written estimate from a bank, building society or mortgage broker showing how much you could, in theory, borrow.

The "in principle" part matters. The decision is based on the information you've provided. It isn't an official mortgage offer, no deep dive into your finances has happened, and it's subject to change once they examine your income, expenses and credit history.

Does getting one affect your score?#

It could, depending on whether the lender runs a hard or soft search.

  • Soft searches happen when you check your own report, or check eligibility for a product. Your full report is typically viewable, but since no formal application is being made, a soft search won't affect your score.
  • Hard searches, or credit application searches, reflect a formal application. Each is recorded, and other companies can see you've recently applied. A lot close together can lower your score.

Good news: many of the UK's mainstream mortgage lenders state that getting an Agreement in Principle with them won't affect your credit score, because it only involves a soft check.

Other lenders may run a hard search before issuing one — though a single hard check in isolation is unlikely to matter much.

Can you get one without a credit check? Yes. Many mortgage brokers offer an MIP as part of their service, and some state no credit check is required. Check before submitting if you're unsure.

Can you get one with bad credit? More challenging, but not impossible. It depends what's bringing your score down, how severe it is and how long ago.

A couple of missed mobile phone payments from three years ago, with nothing since, might well be overlooked — provided the rest of their criteria are met on income, expenses, employment status, deposit and how much you want to borrow.

Always check your credit report before applying for any credit agreement, even in principle. Fixing errors helps your score and your chances. For specific advice, speak to a mortgage broker. There's more in the score you need to buy a house.

What you need to apply#

You usually won't need bank statements, payslips or other supporting documents. The lender or broker will ask you to confirm:

  • Your personal details — full name, date of birth, current address
  • Your address details for the past three years
  • Your income and monthly expenses
  • Information about existing credit agreements
  • How much you have in savings
  • How much you have for a deposit
  • Roughly how much you're looking to borrow

You'll then receive a letter or certificate outlining the amount, which you can take to viewings.

How long does it last? Between 30 and 90 days, depending on the lender.

If you haven't made an offer before it expires, you can renew it or apply for another with the same or a different lender. You can even hold several at once while chasing the best deal — just check whether each involves a soft or hard search.

How reliable is an MIP?#

It's an indication of what you could borrow, assuming you've been truthful and accurate.

It is not a guarantee. You can still be declined for a mortgage after getting one.

At the MIP stage the lender isn't examining your finances in depth, and it isn't tied to a particular property. Once your offer on a home is accepted, you submit a full application — at which point the lender reviews payslips and bank statements, and runs a hard search on your credit report.

They'll also carry out a Mortgage Valuation to confirm the property is worth what you're paying.

With that much more detail, an application can be rejected even by the same lender who issued the MIP. Common reasons:

  • You've failed their affordability criteria
  • Your employment situation has changed — moving from full-time to part-time, say
  • The property has an issue, whether it's valued lower than your offer or built with non-standard construction materials
  • You've missed payments on a credit agreement
  • You have a recent court order or judgment, such as a CCJ

The key things to remember#

  • MIP, DIP, AIP and Mortgage Promise all mean the same thing.
  • Most mainstream lenders use only a soft search, so no impact on your score.
  • Some brokers offer an MIP with no credit check at all.
  • No supporting documents needed — it's based on what you tell them.
  • Valid for 30 to 90 days, and renewable.
  • It's an estimate, not an offer; rejection at full application is still possible.
  • The full application brings a hard search and a property valuation.