If you are starting your property search, one of the first questions you may ask is, what is a mortgage principle?
A mortgage in principle, sometimes called an agreement in principle mortgage or mortgage decision principle, is a written estimate from a lender stating how much you would be able to borrow. It is based on an initial assessment of your income, outgoings and credit history. It is not a formal mortgage offer, but it gives you a clearer idea of your budget before you begin making offers on properties.
At Key Mortgage Advice, our mortgage brokers in Preston, Southport and Garstang help clients understand each step of the mortgage process, from early planning through to completion. Whether you are a first time buyer or moving home, having clarity at the outset can make the entire experience far more manageable.
What is a Mortgage in Principle in the UK?
A mortgage in principle from lenders in the UK provides an early indication of borrowing potential. It confirms that a lender, based on the information you have provided and an initial credit check, would consider lending you up to a certain amount.
It is important to understand that this is not a guaranteed mortgage. The lender has not yet carried out full underwriting, assessed the property, or reviewed detailed documentation. However, it does show that you meet basic criteria.
Mortgage in principles are commonly used by:
- First time buyers wanting to understand their budget
- Home movers preparing to sell and buy
- Buyers who want to strengthen their position when making an offer
- Self employed applicants who want an early indication of affordability
Mortgage in Principle Vs Mortgage Offer
One of the most common areas of confusion is the difference between a mortgage in principle vs mortgage offer.
A mortgage in principle is an early, provisional assessment. A full mortgage offer is issued only after a complete application, detailed underwriting checks and a proper valuation have been carried out.
In simple terms:
- A mortgage in principle tells you what you might be able to borrow
- A mortgage offer confirms the amount the lender will lend, subject to final conditions
The full mortgage offer is the legally binding agreement between you and the lender. A mortgage in principle is not.
This distinction is important because some buyers assume that once they have a mortgage in principle, the mortgage is guaranteed. That is not the case. Final approval depends on affordability checks, documentation, property valuation and lender criteria at the time of application.
Why is a Mortgage in Principle Important?
There are several benefits to having a mortgage in principle when you are house hunting.
- It helps set a realistic budget
Knowing roughly how much you may be able to borrow allows you to search within a sensible price range. This saves time and avoids disappointment later.
You can use our mortgage calculator to get an early estimate before speaking with one of our advisors.
- It strengthens your position with estate agents
Many estate agents will ask whether you have a mortgage in principle before accepting an offer. It shows that you are financially prepared and serious about buying.
In competitive markets, this can give sellers greater confidence in your offer.
- It highlights potential issues early
If there are credit concerns, affordability limits or documentation gaps, it is better to discover these before you find your ideal property.
How to Get a Mortgage in Principle
If you are wondering how to get a mortgage in principle, the process is usually straightforward.
You can apply directly with a lender or work with a mortgage broker. Here at Key Mortgage Advice, we compare mortgages from over 100 lenders. This allows us to assess which lenders may be suitable based on your circumstances before you make a full application.
What Information do Lenders Use for Mortgage in Principle?
Lenders typically ask for:
- Your income and employment details
- Information about self employment if applicable
- Monthly outgoings and financial commitments
- Details of your deposit
- Basic personal information for a credit check
Some lenders use a soft credit check at this stage, while others may carry out a hard search. Many mortgage principles do not significantly affect your credit score, but this can vary by lender. We explain this clearly before proceeding so there are no surprises.
In most cases, a decision can be given quickly once the required information is provided.
Do Mortgage in Principles Affect Credit Score?
Many lenders use a soft credit check for a mortgage decision in principle, which does not leave a visible footprint for other lenders. However, some lenders may use a hard search.
This is why professional advice matters. We can guide you towards lenders whose initial checks are less likely to impact your credit profile, particularly if you are planning multiple applications.
How Long Does a Mortgage in Principle Last?
Mortgages in principle are usually valid for a limited time period. The exact timeframe depends on the lender.
If your circumstances change during that time, such as employment or income, the lender may reassess when you move to a full application. It is important to keep your finances stable between receiving a mortgage in principle and applying for the mortgage itself.
Is a Mortgage in Principle Legally Binding?
No. A mortgage in principle is not legally binding. It does not commit you to the lender and it does not guarantee they will issue a mortgage offer.
The final decision depends on:
- Full affordability assessment
- Supporting documents
- Property valuation
- Underwriting checks
Understanding this prevents unrealistic expectations during the buying process.
How We Can Help
At Key Mortgage Advice, we support buyers at every stage of the process. Our experienced team works with clients across the region, including those looking for mortgage brokers in Preston, Southport and Garstang.
We begin by reviewing your financial position and discussing your goals. From there, we can help secure a suitable mortgage in principle and guide you through to a full mortgage offer.
Because we are not tied to a single lender, we can search across a wide panel to identify appropriate options. We also assist with related services including first time buyer mortgages, remortgages, buy to let mortgages and commercial mortgages where appropriate.
If you would like to speak with us, you can call us on 01772 620000, email us at enquiries@keymortgageadvice.co.uk, or fill in our online contact form to arrange a no obligation appointment.
Mortgage in Principle FAQs
It is not a legal requirement, but most estate agents will expect you to have one. It shows you are serious and financially prepared.
No. It is an indication based on initial checks. Your full mortgage offer depends on detailed affordability checks and a property valuation.
Often it involves a soft credit check, which does not affect your score. Some lenders may carry out a hard check, so it is important to check beforehand.
Yes, although lenders will usually ask for evidence of income, such as recent tax calculations or accounts. We help self employed clients present their income clearly to improve their chances of approval.
