Mortgage in Principle vs Mortgage Offer

When you're thinking about buying a home, it's easy to get lost in a sea of paperwork, acronyms and bank jargon. Two terms that often get confused are Mortgage in Principle and Mortgage Offer. They sound similar, but they mean very different things. If you're serious about buying, understanding the difference can save you time, stress, and potentially even your dream home.

Let me break it down simply.

What is a Mortgage in Principle?

A Mortgage in Principle (sometimes called an Agreement in Principle or Decision in Principle) is an initial statement from a lender. It tells you how much they might be willing to lend you based on a basic overview of your finances. This isn’t a commitment. It’s more like a financial "maybe."

To get one, the lender will usually ask for some basic information about your income, outgoings, credit history, and how much deposit you’ve saved. Some lenders will run a soft credit check, which doesn’t affect your credit score. Others might do a hard check, which will leave a mark on your credit file, so it’s worth asking before you apply.

Once issued, a Mortgage in Principle usually lasts 60 to 90 days. It’s not legally binding, and it doesn’t mean your mortgage is guaranteed. But it can be incredibly helpful when you're house hunting. Sellers and estate agents take you more seriously if you can show you've already spoken to a lender and have a ballpark figure for what you can afford.

What is a Mortgage Offer?

This is the big one. A Mortgage Offer is a formal document from a lender confirming that they are willing to lend you a specific amount for a particular property. It comes after you've submitted a full mortgage application and the lender has reviewed everything in detail.

At this stage, you’ll have gone through credit checks, affordability assessments, and the lender will have arranged a valuation on the property. If all goes well, they issue a Mortgage Offer, which is legally binding and usually valid for 3 to 6 months.

This is the green light. Once you have your offer, you can move forward with exchanging contracts and completing your purchase.

Key Differences at a Glance

	Mortgage in Principle	Mortgage Offer
Binding?	No	Yes
When?	Early stage of home search	After full application and checks
Purpose	To get an estimate and show intent	To formally secure the loan
Checks Involved	Basic details, credit check	Full financial review and property valuation

Why Both Matter

One gives you confidence to start your search. The other gets you over the finish line. In a competitive market, having a Mortgage in Principle can give you an edge over other buyers. And once you’ve had an offer accepted, securing the Mortgage Offer is what gets you the keys.

But here’s the thing: people often confuse the two, or assume that once they’ve got a Mortgage in Principle, they’re good to go. I’ve seen clients caught off guard when lenders ask for extra documentation or change the terms. That’s why getting the right advice at the start makes all the difference.

How I Can Help

This is where I come in. I guide clients through the entire process, from that first Mortgage in Principle to the moment the lender issues the final offer. I make sure everything is in order, flag any potential issues early, and work to get you a deal that suits your situation.

Please get in touch if you’d like more help or advice.