Glossary · UK
What is Agreement in Principle?
An indication from a lender of how much it might lend you, based on a preliminary check before a full mortgage application.
Full Definition
An agreement in principle, also called a decision in principle or mortgage in principle, is a statement from a lender suggesting how much it might be willing to lend you. It is based on basic information about your income, outgoings and a credit check, and it gives you a realistic budget before you start viewing properties. Estate agents and sellers often want to see one to confirm you are a serious buyer, which can strengthen your position when making an offer. An agreement in principle is not a guaranteed mortgage offer: the lender still needs to assess the property, verify your documents and complete full affordability checks before issuing a binding offer. The figure quoted is illustrative and varies by lender, so it can change once your full application is reviewed. Obtaining one usually takes a short time online or through a broker, and many use a soft credit check that does not affect your credit score, though some use a hard check, so it is worth asking. An agreement in principle typically lasts a limited period, often a few months, after which it may need refreshing.