What’s the Difference Between a Mortgage in Principle and a Mortgage Offer?
If you’re starting your home buying journey, you’ve probably heard terms like "Mortgage in Principle" and "Mortgage Offer" thrown around.
They sound similar — but they’re very different stages in the mortgage process. Knowing the difference can save you time, stress, and even help you secure your dream home faster.
What Is a Mortgage in Principle (MIP)?
A Mortgage in Principle (also called an Agreement in Principle or Decision in Principle) is a statement from a lender saying they’re likely to lend you a certain amount — based on basic checks.
Think of it as a “soft yes.”
What it’s good for:
- Gives you a clear idea of your budget
- Shows estate agents and sellers you’re a serious buyer
- Can make your offer more attractive
What it’s not:
- A guarantee
- A formal approval
- The final stage in the process
What Is a Mortgage Offer?
A Mortgage Offer is the formal agreement from a lender confirming that they will give you a mortgage — subject to certain conditions (like valuations or legal checks).
It comes after you apply and provide all documents, and means you’re ready to move forward with your purchase.
What’s involved:
- Full credit check
- Proof of income
- Bank statements
- A property valuation
- Lender underwriting and affordability checks
Once this is done, you get your official Mortgage Offer — and can move ahead with confidence.
Summary: What’s the Difference?
| Mortgage in Principle | Mortgage Offer
-----------------------|---------------------------|-----------------------------
When you get it | Early in the process | After full application
Based on | Basic details and soft check | Full credit and income checks
Binding? | No | Yes (subject to conditions)
Useful for | House hunting & making offers | Exchanging and completing
Do I Need Both?
Yes — most buyers will need both. You’ll usually start with a Mortgage in Principle to go house-hunting, and then apply for a full Mortgage Offer once your offer on a property is accepted.
Let’s Make It Simple
At The Mortgage Lodge, we help you through every step — from getting your Mortgage in Principle all the way to completion day.
We make the jargon make sense, and the process feel human.
Ready to get started? Drop us a message — we’re here to help.