How long does a mortgage in principle last

You’ll hear the term mortgage in principle fairly often during the homebuying process. If you’re wondering what it means and how it will affect you, read on.

This guide answers questions about the duration of a mortgage in principle, what one allows you do, and what happens if time runs out.

We’ve also written a beginner’s guide to mortgages, which you may find helpful.

What is a mortgage in principle?

A mortgage in principle is a statement from a lender that they will consider lending you the stated amount. It is not a legally binding agreement that they will lend you the money, but in most cases a mortgage in principle will lead to a loan being made if the next steps are completed within the stated time frame.

You may also see the terms decision in principle, or agreement in principle (AIP).

How long does one last?

A mortgage in principle usually lasts around 6 months from Northern Irish banks, or between 60 and 90 days from lenders in Great Britain.

Here are some lengths of mortgages in principle from well-known high street lenders in the UK:

What can I do while I have a mortgage in principle?

The mortgage in principle gives you an idea of how much a lender would be happy to lend, rather than a commitment that you will definitely be able to borrow. Receiving one gives you the peace of mind to look at properties in a price range you can demonstrably afford, which in turn allows you to initiate the next steps of the house-buying process.

A mortgage in principle also demonstrates to estate agents that you are serious about buying a property, which will hopefully encourage them to move the process along.

What happens if the time runs out?

If you reach the end of the timeframe your mortgage in principle is valid for without being ready to move ahead in the mortgage application process, you will have to request a new one.

Some lenders will reissue the same one, while others may require you to restart the application to determine whether your circumstances have changed.

It is worth trying to get everything done within the initial time frame, as lenders can change their lending criteria and potentially reduce the amount they are willing to lend if your circumstances do change between applications.

Can I re-apply for an AIP?

You can re-apply. Lenders check your credit when preparing an AIP, meaning that repeated applications can have a negative impact on your credit score.

While applying again isn’t ideal, it may be a necessary step in your mortgage application.

If you have any other questions about mortgages in principle, or would like to speak to one of our mortgage advisors about moving house, get in touch. We’ll be happy to help.