Learn how to get a mortgage in principle

A mortgage in principle also called a “mortgage promise”, an “agreement in principle” or a “decision in principle” is a statement from a lender that essentially says they would, in principle, be willing to lend you X amount to purchase a home. The mortgage in principle is not binding upon the lender, but it may still help you considerably, especially if you are a first time home buyer.


To obtain a mortgage in principle you will need to approach the lender and provide some basic information about yourself including your name, date of birth, several years of address history, your current income and your current expenditures. In most cases, you will not need to provide supporting documentation since the mortgage in principle is not binding.

The prospective lender will take this information, run a few rudimentary checks and, if they like what they see, will issue you a mortgage in principle saying they would not be averse to lending you X amount.


First time home buyers are unproven commodities. Therefore, estate agents will often want a first-time buyer to obtain a mortgage in principle so that the agent knows they’re not wasting their time. Recent statistics indicate that more than 60% of first-time buyers obtain a mortgage in principle before shopping for a home.

The mortgage in principle establishes basic parameters around your home search. It tells estate agents and sellers that you’re serious, establishes an approximate ceiling on your search and, if you display interest in a home that falls within the approved amount, it can go a long way toward facilitating a deal.


As we mentioned, a mortgage in principle is not binding upon the lender. If, during the full application process they uncover something they don’t like, they can decide not to lend to you.

In most cases, the lender will run a hard credit search before deciding to offer you a mortgage in principle. This may result in points being deducted from your credit score.

First time home buyers should seriously consider obtaining a mortgage in principle.