What is a mortgage-in-principle?

A mortgage in principle (also known as an ‘agreement in principle,’ a ‘decision in principle’ and a ‘mortgage promise’) is an official document from a mortgage lender that confirms they think you’d get approved for a mortgage based on what they know about you so far.

Normally, getting a mortgage in principle is the first step in the process of buying a house (although you don’t technically need one to get a mortgage). This is because...

1. It helps you to avoid rejection: Getting rejected for a mortgage can make it harder to get a mortgage in the future. A mortgage in principle will give you a good idea of whether you’re likely to get approved or not, so you can avoid applying for mortgages you won’t be able to get.
   

2. It helps you budget: A mortgage in principle will show you how much a lender thinks they’ll be willing to let you borrow. That means you can search for properties you actually stand a chance of affording.
   

3. It’ll please estate agents: Some estate agents and sellers won’t accept an offer you make on a property unless they can see your mortgage in principle first. Sometimes, they won’t even let you view properties without one!

A mortgage in principle normally lasts between 60 and 90 days. Once you’ve had an offer accepted on a property, you can simply apply to turn your mortgage in principle into a full mortgage offer.