Mortgages
What is a mortgage in principle, and when should you get one?
2 min read · Updated
The short answer
A mortgage in principle is a lender saying roughly how much it might lend you, based on a quick look at your income and credit. It isn't a promise to lend, but agents like to see one before they take your offer seriously.
What it is
Also called an agreement in principle or a decision in principle, it's a certificate from a lender with a figure on it. To get one you give your income, outgoings and address history, and the lender checks your credit file.
What it isn't
It isn't a mortgage offer. The full application comes after your offer on a home is accepted, with payslips, bank statements and a valuation of the home. The lender can still say no, or lend less, at that stage.
When to get one
- When you're ready to view seriously. It tells you a realistic budget before you fall for a home you can't reach.
- Before you make an offer. Many agents ask for it, and it makes you look ready to the seller.
- Not months too early. Most last 30 to 90 days, depending on the lender, so time it for when you're actively looking.
What you'll need
- Your income, and any regular bonuses or overtime.
- Your regular outgoings, like loans, cards and childcare.
- Your addresses for the last three years.
- How much deposit you have, and where it's from.
As a rough guide, many lenders lend around 4.5 times your income. A mortgage broker can find the lenders most likely to say yes, and many charge first-time buyers nothing.
A guide, not financial or legal advice. Rules and rates change, so check with your lender, broker or solicitor. Where our numbers come from.