Key facts
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- Independent editorial guide - no affiliate links, no commission
- Sources: FCA, gov.uk, HMRC, Money and Pensions Service
- Last reviewed June 2026 by Chandraketu Tripathi, Finance Editor
What Is a Decision in Principle?
A decision in principle (DIP), also called an agreement in principle (AIP) or mortgage in principle (MIP), is a lender's written statement indicating how much it is prepared to lend based on an initial review of the borrower's financial position. A decision in principle is not a formal mortgage offer and creates no legal obligation on the lender to proceed.
Lenders issue a decision in principle after conducting an initial credit assessment - either a soft search or a hard search depending on the lender - and reviewing basic income and expenditure information. The decision in principle tells the borrower the indicative maximum loan available before a property is found.
A decision in principle is used to demonstrate to estate agents and vendors that the buyer has completed preliminary financial checks and is a credible purchaser. In competitive property markets, having a decision in principle before making offers is almost essential.
Decision in Principle vs Mortgage Offer
A decision in principle is a preliminary indication; a formal mortgage offer is the binding commitment. The distinction matters significantly. A decision in principle can be withdrawn or revised at any point before the formal offer is issued if circumstances change or if the full application reveals information not disclosed at the decision in principle stage.
The formal mortgage offer is issued after the lender has completed a full affordability assessment, verified income documents, obtained a property valuation, and assessed the credit file in detail. The formal offer is binding on the lender (subject to conditions) for a specified period, typically three to six months.
Borrowers should not commit to non-refundable expenditure - survey costs, exchange of contracts, or giving notice on a rental property - on the basis of a decision in principle alone. Only a formal mortgage offer provides the confidence to proceed with these commitments.
How to Get a Decision in Principle
A decision in principle can be obtained directly from a lender's website in most cases - the online application typically takes 10 to 15 minutes. Alternatively, a mortgage broker can obtain a decision in principle on the borrower's behalf, often identifying the most appropriate lender first based on the borrower's profile.
Information required for a decision in principle includes: full name and date of birth; address history for the past three years; current employment status and income; existing monthly financial commitments; the estimated purchase price; and the deposit amount. No property details are needed at the decision in principle stage.
Borrowers should request whether the lender conducts a hard or soft credit search for the decision in principle before proceeding. Hard searches affect the credit score and are visible to other lenders; soft searches do not. Multiple hard searches in a short period can reduce the credit score and trigger additional questions from future lenders.
Decision in Principle: Hard vs Soft Credit Search
Some lenders conduct a hard credit search as part of the decision in principle process; others use a soft search. A hard search for a decision in principle records a full inquiry on the borrower's credit file and is visible to all future lenders. Multiple decision in principle applications with hard searches can reduce the credit score.
A soft search for a decision in principle retrieves the credit information needed for assessment without leaving a visible footprint on the credit file. Soft search decision in principle applications have no impact on the credit score and are not visible to other lenders.
Borrowers who are comparing decision in principle offers from multiple lenders should prioritise lenders who use soft searches for the initial assessment. Asking the broker or lender before applying which type of search is used for the decision in principle avoids unintended credit file impact.
How Long Does a Decision in Principle Last?
A decision in principle typically remains valid for 60 to 90 days from the date of issue. After this period, the decision in principle expires and a new application is required. Most lenders will renew a decision in principle with a new credit check if the borrower's property search has not yet been successful.
If circumstances change during the validity period of the decision in principle - a new credit commitment, a change of employer, or a significant income change - the lender may adjust the decision in principle when the full application is submitted, even if the original decision in principle has not expired.
Borrowers who receive a decision in principle should aim to submit the full application before it expires to avoid an additional credit search. Keeping financial circumstances stable between the decision in principle and the formal offer is important to ensure the final outcome matches the indicative approval.
What to Do After Getting a Decision in Principle
After obtaining a decision in principle, the buyer is in a strong position to begin serious property viewings and to make credible offers. Informing the estate agent that a decision in principle is in place when making an offer demonstrates financial preparation and can strengthen the offer in competitive situations.
Once an offer is accepted, the buyer should submit a full mortgage application as quickly as possible. The full application requires detailed documentation - payslips, bank statements, proof of address, and employer details - which should be assembled in advance to avoid delays.
Between receiving the decision in principle and the formal offer, borrowers should avoid taking on new credit. Any new credit commitment changes the financial profile assessed in the decision in principle and may alter the outcome at the full application stage.
Disclaimer: This guide is for informational purposes only and does not constitute financial advice. Products, eligibility criteria and regulations change frequently. Consult an FCA-authorised adviser before making any decision. Kael Tripton Ltd is not authorised or regulated by the Financial Conduct Authority.
Frequently Asked Questions
What is a decision in principle for a mortgage?
A decision in principle is a lender's initial written indication of how much they are prepared to lend based on a basic financial assessment. It is also called an agreement in principle or mortgage in principle. It is not a formal mortgage offer and is not legally binding.
How long does a decision in principle take?
Most lenders issue a decision in principle within minutes via their online application. A mortgage broker may take slightly longer if they are comparing options across multiple lenders to identify the most suitable. The decision in principle itself typically remains valid for 60 to 90 days.
Does a decision in principle affect my credit score?
It depends on whether the lender uses a hard or soft credit search. A soft search has no impact on the credit score. A hard search reduces the score slightly and is visible to other lenders. Always ask which type of search applies before requesting a decision in principle.
Is a decision in principle the same as a mortgage in principle?
Yes. Decision in principle, agreement in principle and mortgage in principle are all terms for the same thing - a lender's preliminary indication of how much they will lend. Different lenders use different terminology for the same stage of the process.
Can a decision in principle be refused?
Yes. A decision in principle can be declined if the lender's initial assessment indicates the borrower does not meet their lending criteria. A declined decision in principle does not prevent applying elsewhere, and a mortgage broker can identify lenders more likely to approve based on the specific circumstances.
Sources
Last reviewed June 2026 by Chandraketu Tripathi, Finance Editor, Kaeltripton.com
