AIP vs DIP: Agreement in Principle vs Decision in Principle

If you're starting the mortgage process, you've probably come across both "AIP" and "DIP" and wondered what the difference is. The short answer: there isn't one. They're the same thing with different names. But understanding what they actually mean — and what they don't — is crucial before you start house hunting.

AIP and DIP Are the Same Thing

Let's clear this up immediately:

• AIP = Agreement in Principle
• DIP = Decision in Principle

Some lenders also call it a Mortgage in Principle (MIP) or a Mortgage Promise. They all mean the same thing: a lender has done a preliminary check and, based on the information you've provided, they'd likely be willing to lend you a certain amount.

Different lenders use different terminology:

• Barclays calls it a "Mortgage in Principle"
• Halifax uses "Agreement in Principle"
• Nationwide says "Decision in Principle"
• HSBC calls it a "Mortgage Promise"

Don't let the naming confuse you. The process, meaning, and limitations are identical regardless of what any particular lender calls it.

What an AIP Actually Tells You

An AIP is a preliminary indication — nothing more. It says: "Based on the basic information you've given us, and a quick check of your credit, we'd probably lend you up to £X."

It confirms:

• The lender has done an initial affordability assessment based on your stated income and outgoings
• A basic credit check (soft or hard) hasn't thrown up any immediate red flags
• You'd likely be eligible for a mortgage up to a certain amount

It does not confirm:

• That you'll definitely get a mortgage
• That they'll lend on the specific property you want to buy
• That a full underwriting assessment will agree with the initial check
• That your income documentation will check out when they verify it

Think of it like a doctor saying "based on what you've told me, you're probably fine" before they've done any tests. It's encouraging, but it's not a diagnosis.

Why You Need an AIP

Estate Agents Expect One

Most estate agents won't take your offer seriously without an AIP. It shows you've taken the first step and that a lender has provisionally agreed to lend you the money. In competitive markets, sellers may reject offers from buyers who can't show an AIP.

It Gives You a Realistic Budget

An AIP tells you what a lender is actually willing to lend, which may be very different from what an online calculator suggested. It's better to discover this before you fall in love with a property you can't afford.

It Speeds Up the Process

Once you've had an offer accepted and need to move to a full mortgage application, having an existing AIP with a lender means you've already done the first stage. Some of the information can be carried forward.

The Process of Getting an AIP

Getting an AIP is straightforward and usually takes 15-60 minutes. Here's what you'll need:

Information Required

• Personal details: Name, date of birth, address history (usually 3 years)
• Income: Salary, any additional income (bonuses, overtime, rental income)
• Employment: Employer name, job title, how long you've been there
• Outgoings: Existing debts, credit commitments, childcare costs
• Deposit amount: How much you're putting down
• Property value: Approximate value of what you're looking to buy

How to Apply

You can get an AIP:

• Online — most lenders have an online AIP tool that takes 15-30 minutes
• Over the phone — call the lender's mortgage team
• Through a broker — your broker can obtain AIPs from their lender panel
• In branch — some people prefer a face-to-face conversation

Soft vs Hard Credit Searches at AIP Stage

This is where it gets important. When a lender processes your AIP, they'll check your credit. This can be either a soft search or a hard search:

• Soft search: Only visible to you on your credit report. Other lenders can't see it. No impact on your credit score. Most lenders now use soft searches at AIP stage.
• Hard search: Visible to other lenders. Multiple hard searches in a short period can negatively affect your credit score and make you look desperate for credit.

Lenders that typically use soft searches at AIP:

• Barclays
• Halifax / Bank of Scotland
• Nationwide
• HSBC
• NatWest / RBS

Lenders that may use hard searches at AIP:

• Some specialist lenders
• Some building societies

This changes over time, so always confirm with the lender or your broker before proceeding. If you have concerns about your credit score, read our full guide on soft vs hard credit searches.

How Long Does an AIP Last?

Most AIPs are valid for 60 to 90 days, though this varies by lender:

If your AIP expires before you find a property, you can usually renew it. Some lenders renew automatically with a quick check; others require a fresh application. Ask your lender what their renewal process involves — specifically whether it triggers another credit search.

Can You Be Declined After Getting an AIP?

Yes. This is the most important thing to understand about AIPs. Getting an AIP does not guarantee a mortgage. You can absolutely be declined at full application stage. Common reasons include:

Things the AIP Didn't Check

• The specific property — the lender hasn't valued it yet. If the valuation comes in low, or the property has issues (non-standard construction, short lease, flood risk), they may decline.
• Your bank statements — at AIP stage, you stated your income and outgoings. At full application, they'll verify this by reviewing your bank statements. If there are gambling transactions, returned direct debits, or evidence of undisclosed debts, this can cause problems.
• Full underwriting assessment — the AIP was processed automatically or by a basic check. Full underwriting is more thorough and may identify issues the AIP process missed.

Things That Changed

• Your circumstances changed — you changed jobs, took on new debt, or your income dropped between AIP and full application
• The lender changed their criteria — lenders regularly update their lending policies
• Your credit situation changed — a new default appeared, or your credit score dropped

AIP with Bad Credit

If you have adverse credit, getting an AIP is still possible but requires more thought. Mainstream lenders may decline you at AIP stage, which is actually useful — it tells you early that you need a specialist lender.

Options if you have credit issues:

• Use a specialist broker who can check your eligibility with adverse credit lenders before running any searches
• Focus on lenders known for adverse credit: Kensington, Pepper Money, Aldermore, Bluestone
• Be upfront about your credit history — don't hope it won't be found. It will

Read our detailed guide on bad credit mortgages for more information.

Multiple AIPs: Is It a Good Idea?

Generally, it's worth sticking to one or two AIPs at a time. Here's why:

• If they involve hard searches, multiple AIPs damage your credit profile
• Even with soft searches, having multiple AIPs doesn't help — estate agents only need to see one
• It doesn't meaningfully increase your chances of getting a mortgage

The exception: if a broker checks your eligibility with multiple lenders using soft searches to find the best fit, this can be sensible. That's different from you applying for AIPs independently with six different lenders.

From AIP to Full Application

Once your offer on a property is accepted, you'll move from AIP to full mortgage application. This is a much more thorough process:

1. Full application form — more detailed than the AIP
2. Supporting documents — payslips, bank statements, ID, proof of deposit
3. Hard credit search — even if the AIP was a soft search, the full application will be a hard search
4. Property valuation — the lender sends a surveyor to value the property
5. Full underwriting — a detailed assessment of your case
6. Mortgage offer — if everything checks out

The full process typically takes 2-6 weeks from application to offer, though it can be faster or slower depending on the lender and complexity.

Frequently Asked Questions

Does an AIP guarantee I'll get a mortgage?

No. It's a preliminary indication only. You can still be declined at full application.

Can I make an offer without an AIP?

Legally, yes. Practically, most estate agents won't take your offer seriously without one.

Does an AIP commit me to that lender?

No. An AIP is not binding on either side. You can apply to a different lender for your full mortgage.

Can I get an AIP if I'm self-employed?

Yes, but you may need to provide more detail about your income at the AIP stage than an employed applicant would.

What if I need to borrow more than my AIP says?

You'd need to either increase your income, reduce your debts, increase your deposit, or find a lender with more generous affordability calculations. A broker can help identify the most generous lenders for your situation.

This is educational content, not financial advice. Your situation is unique — speak to a qualified mortgage broker before making any decisions.