A Mortgage in Principle (MIP) — also called an Agreement in Principle (AIP) or Decision in Principle (DIP) — is a written statement from a lender indicating how much they would be willing to lend you, based on a preliminary assessment of your finances.

It is not a mortgage offer. It does not guarantee that a full mortgage will be approved. But it is a useful and often necessary step when house-hunting in the UK.

What does it involve?

To produce an MIP, the lender asks for basic information: your income, employment status, existing debts, deposit size, and the type of mortgage you want. They then run a credit check and produce an indicative lending figure.

At the full mortgage application stage, they will verify everything with documentation — payslips, P60, bank statements, proof of deposit. The MIP figure can change once these checks are completed.

Soft vs hard credit check

This is one of the most important practical questions to ask before requesting an MIP. There are two types of credit check:

• Soft search — visible only to you on your credit file, not to other lenders. Does not affect your credit score. Most lenders use this for MIPs.
• Hard search — leaves a visible footprint on your credit file for 12 months. Multiple hard searches in a short period can reduce your score and signal credit-seeking behaviour to other lenders.

Before obtaining an MIP, confirm whether it involves a soft or hard search. If you are house-hunting seriously and may approach multiple lenders, using a mortgage broker can reduce the number of individual hard searches, as they can identify the most suitable lender before a formal search is made.

How long does it last?

Most MIPs are valid for 60 to 90 days. After that, they expire and a new one must be requested (which may involve a new credit check). If your financial situation changes — new job, new debt, change in income — the new MIP may produce a different figure.

Why estate agents ask for one

Estate agents routinely ask for an MIP before accepting an offer, or before allowing viewings on some properties. This is not a legal requirement, but it is standard practice. An MIP demonstrates that:

• You have begun the mortgage process and understand broadly what you can borrow
• A lender has at least provisionally confirmed your financial position
• You are a more credible buyer than someone who has not started

Sellers and agents in competitive markets tend to favour buyers with MIPs over those without, all else being equal.

Getting one: direct vs broker

You can obtain an MIP directly from a lender via their website or branch. Alternatively, a whole-of-market mortgage broker can obtain one on your behalf after reviewing your situation and identifying the most suitable lender. A broker can also give context on whether the figure is accurate, or if there are lenders likely to offer more. MoneyHelper (moneyhelper.org.uk) has a free tool to find a regulated mortgage broker.