Agreement in Principle vs Full Application – What’s the Difference?

Agreement in Principle vs full application: the key differences, when to use each, and how they affect your home buying journey.

Buying your first home often starts with hearing about an ‘Agreement in Principle’ (AIP). It feels like progress, but then you’re told you’ll need to complete a ‘full mortgage application’ later. The terms sound similar, but they serve very different purposes.

Understanding the difference can help you avoid frustration, delays, or false confidence as you begin your journey.

What is an Agreement in Principle?

An Agreement in Principle (sometimes called a Decision in Principle) is a lender’s initial indication of what they may be willing to lend to you. It’s based on a soft credit check and the information you provide about your income, outgoings, and commitments.

It’s not a guarantee — but it gives estate agents and sellers confidence that you’re a serious buyer.

What is a Full Mortgage Application?

The full application is where the lender takes a deep dive into your financial situation. This stage involves a hard credit check, detailed assessment of your payslips, bank statements, debts, and commitments, plus a valuation of the property you want to buy.

It’s at this stage that the lender confirms how much they’ll actually lend and on what terms.

The key differences between the two

The main differences between an Agreement in Principle and a full application include:
- **Checks:** AIP uses a soft check, full application uses a hard check.
- **Information needed:** AIP is based on your inputs, full application requires documents.
- **Purpose:** AIP is for guidance, full application is for commitment.
- **Validity:** AIPs often last 30–90 days, but a mortgage offer can last up to 6 months.

Why both stages matter

The AIP gets your foot in the door, but the full application secures the mortgage. Think of the AIP as a ‘heads up’ and the full application as the real decision.

Common mistakes buyers make

Some buyers rely too heavily on their AIP figure and overstretch their budget, only to be offered less at the full application stage. Others think an AIP is guaranteed approval, which can lead to disappointment.

The best approach is to treat the AIP as an early guide — and plan realistically for the full application.

The Bottom Line

Both an Agreement in Principle and a full application have their place. The first shows you’re serious, the second seals the deal.

Your home may be repossessed if you do not keep up repayments on your mortgage or other loan secured against it.

• Does an Agreement in Principle affect my credit score?

  No, most AIPs use a soft check that doesn’t leave a mark. But the full application uses a hard check.

• How long does an Agreement in Principle last?

  Usually between 30–90 days, depending on the lender.

• Can my full application be rejected after getting an Agreement in Principle?

  Yes. If the lender finds issues with your credit history, documents, or the property valuation, they may decline.