--- title: "Does a Mortgage in Principle Include Your Deposit? | First Rung Now" description: "No — your MIP is the loan only. Learn how UK Mortgages in Principle work, how to calculate your real buying budget, and what lenders check at MIP stage." lang: en-GB json-ld: | [ { "@context": "https://schema.org", "@type": "Organization", "name": "First Rung Now", "url": "https://firstrungnow.com", "logo": { "@type": "ImageObject", "url": "https://firstrungnow.com/logo-512.png", "width": 512, "height": 512 }, "description": "Independent UK mortgage education and broker matching service.", "address": { "@type": "PostalAddress", "addressCountry": "GB" } }, { "@context": "https://schema.org", "@type": "WebSite", "name": "First Rung Now", "url": "https://firstrungnow.com" }, { "@context": "https://schema.org", "@type": "Article", "headline": "Does a Mortgage in Principle Include Your Deposit?", "description": "No — your MIP is the loan only. Learn how UK Mortgages in Principle work, how to calculate your real buying budget, and what lenders check at MIP stage.", "author": { "@type": "Organization", "name": "First Rung Now" }, "publisher": { "@type": "Organization", "name": "First Rung Now", "url": "https://firstrungnow.com" }, "mainEntityOfPage": "https://firstrungnow.com/mortgage-in-principle-deposit", "datePublished": "2026-06-15", "dateModified": "2026-06-15", "inLanguage": "en-GB" }, { "@context": "https://schema.org", "@type": "BreadcrumbList", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://firstrungnow.com/" }, { "@type": "ListItem", "position": 2, "name": "Mortgage Guides", "item": "https://firstrungnow.com/mortgage-guides" }, { "@type": "ListItem", "position": 3, "name": "MIP and Your Deposit", "item": "https://firstrungnow.com/mortgage-in-principle-deposit" } ] }, { "@context": "https://schema.org", "@type": "FAQPage", "mainEntity": [ { "@type": "Question", "name": "Does a mortgage in principle include your deposit?", "acceptedAnswer": { "@type": "Answer", "text": "No. A mortgage in principle (MIP, also called a Decision in Principle or Agreement in Principle) is the maximum amount a lender is willing to lend you — it does not include your deposit. Your total purchase budget is the MIP figure plus the cash deposit you'll put in yourself." } }, { "@type": "Question", "name": "How do I work out my total purchase budget from an MIP?", "acceptedAnswer": { "@type": "Answer", "text": "Add your MIP to your deposit, then subtract a buffer for stamp duty, legal fees, valuation, broker fees and moving costs. For example: MIP £225,000 + deposit £50,000 = £275,000 gross. After roughly £5,000–£12,000 of buying costs, your effective purchase budget is around £263,000–£270,000." } }, { "@type": "Question", "name": "Is the deposit subtracted from the MIP figure?", "acceptedAnswer": { "@type": "Answer", "text": "No — that's the most common misunderstanding. The MIP is the loan size only. The deposit sits on top of it. If a lender issues an MIP of £200,000 and you have £40,000 deposit, you can offer up to £240,000 on a property, not £200,000." } }, { "@type": "Question", "name": "Why doesn't the MIP include the deposit?", "acceptedAnswer": { "@type": "Answer", "text": "Because the lender's commitment is only to the loan portion. The deposit is your own contribution and the lender has no role in providing it. Showing them separately keeps the lender's exposure (the loan) distinct from the borrower's contribution (the deposit)." } }, { "@type": "Question", "name": "Will the lender check my deposit at MIP stage?", "acceptedAnswer": { "@type": "Answer", "text": "Usually not in detail. At MIP stage they confirm you have enough deposit to meet their minimum (typically 5% for first-time buyers, 10–15% for residential remortgages). Full source-of-deposit checks happen at full application — bank statements, gift letters for family deposits, and so on." } }, { "@type": "Question", "name": "Can I increase my MIP by putting down a bigger deposit?", "acceptedAnswer": { "@type": "Answer", "text": "Indirectly, yes. A larger deposit lowers the LTV, which can unlock better rates and sometimes higher income multiples — so the lender may offer you a higher MIP because the affordability stress passes more easily at the cheaper rate. The deposit itself still isn't part of the MIP number." } } ] } ] --- [Skip to content](#main) [London 020 8088 2997 ](tel:02080882997)[National 0333 567 1185 ](tel:03335671185) [![First Rung Now](/assets/logo-mark-CNo3p3DP.png) First Rung Now UK Mortgage Guides ](/) - Mortgages - Remortgages - Buy To Let - Bad Credit - Calculators - Guides - [Find a Broker](/find-a-mortgage-broker) - [About](/about) [London 020 8088 2997 ](tel:02080882997)[National 0333 567 1185 ](tel:03335671185) [Speak to a Vetted Broker](/find-a-mortgage-broker) 1. [Home](/) 2. [Mortgage Guides](/mortgage-guides) 3. MIP and Your Deposit UK Mortgage Guide # Does a Mortgage in Principle Include Your Deposit? One of the most common first-time-buyer misunderstandings: assuming a Mortgage in Principle (MIP) covers your whole purchase budget. It doesn't. The MIP is the loan figure only — your deposit is added on top — and getting that distinction right changes the price you can offer on a property. First Rung Now Editorial Updated 15 June 2026 7 min read On this page 1. [Key takeaways](#key-takeaways) 2. [What a Mortgage in Principle actually is](#what-a-mortgage-in-principle-actually-is) 3. [How the maths actually works](#how-the-maths-actually-works) 4. [Don't forget the buying costs](#dont-forget-the-buying-costs) 5. [What lenders check at MIP stage](#what-lenders-check-at-mip-stage) 6. [How deposit size influences the MIP indirectly](#how-deposit-size-influences-the-mip-indirectly) 7. [Common pitfalls](#common-pitfalls) 8. [Reading the MIP as the offer price ceiling](#reading-the-mip-as-the-offer-price-ceiling) 9. [Not adding the deposit to your search filters](#not-adding-the-deposit-to-your-search-filters) 10. [Treating the MIP as a guarantee](#treating-the-mip-as-a-guarantee) 11. [Letting the MIP expire](#letting-the-mip-expire) 12. [Pros](#pros) 13. [Cons](#cons) 14. [Speak with a vetted mortgage broker about getting a Mortgage in Principle that reflects your real budget](#speak-with-a-vetted-mortgage-broker-about-getting-a-mortgage-in-principle-that-reflects-your-real-budget) 15. [The simple formula to remember](#the-simple-formula-to-remember) 16. [Frequently asked questions](#frequently-asked-questions) 17. [Does a mortgage in principle include your deposit?](#does-a-mortgage-in-principle-include-your-deposit) 18. [How do I work out my total purchase budget from an MIP?](#how-do-i-work-out-my-total-purchase-budget-from-an-mip) 19. [Is the deposit subtracted from the MIP figure?](#is-the-deposit-subtracted-from-the-mip-figure) 20. [Why doesn't the MIP include the deposit?](#why-doesnt-the-mip-include-the-deposit) 21. [Will the lender check my deposit at MIP stage?](#will-the-lender-check-my-deposit-at-mip-stage) 22. [Can I increase my MIP by putting down a bigger deposit?](#can-i-increase-my-mip-by-putting-down-a-bigger-deposit) 23. [Related guides](#related-guides) 24. [UK Mortgages Hub](#uk-mortgages-hub) 25. [Mortgage Calculators](#mortgage-calculators) 26. [Find a Mortgage Broker](#find-a-mortgage-broker) ### First-time buyers — related reads MIPs, deposits, schemes and the UK buying process. - [House buying timeline What actually happens — and how long it takes — between offer accepted and keys. ](/house-buying-timeline) - [£300k home loan Salary, deposit, monthly cost and stamp duty for a £300,000 mortgage. ](/300k-home-loan) - [Help to Buy calculator Equity loan repayment maths and the schemes that replaced Help to Buy in England. ](/help-to-buy-calculator-mortgage) - [No deposit mortgage Every active UK 100% LTV product and the trade-offs that decide fit. ](/no-deposit-mortgage) - [FTB affordability rules 2026 The three affordability tests, stress rates and LTI limits shaping 2026 budgets. ](/first-time-buyer-affordability-rules-2026) Explore the hubs [Mortgages explained](/mortgages)[Remortgages](/remortgages)[Buy-to-let mortgages](/buy-to-let)[Bad credit mortgages](/bad-credit-mortgages)[Mortgage calculators](/mortgage-calculators)[All mortgage guides](/mortgage-guides)[Find a mortgage broker](/find-a-mortgage-broker) ## Key takeaways - An MIP shows the loan amount only — it does not include your deposit. - Your purchase budget = MIP + deposit − buying costs. - At MIP stage, lenders confirm you have a deposit but don't deeply verify it. - A larger deposit reduces LTV, which can indirectly raise your MIP via cheaper stress rates. - MIPs are typically valid for 30–90 days and rely on a soft credit search. ## What a Mortgage in Principle actually is Want a vetted broker to help with What a Mortgage in Principle actually is? Free FCA-regulated introduction. We carefully check the broker matches your scenario — no pressure, no upfront fees. [Match me with a broker](/find-a-mortgage-broker) A Mortgage in Principle (also called an Agreement in Principle or Decision in Principle) is a written indication from a lender that, based on the information you've supplied, they would in principle be willing to lend you up to a stated figure. It is not a binding mortgage offer. Lenders run a soft credit search and run your declared income and outgoings through their affordability calculator to arrive at the figure. The MIP itself sits between you and the lender as a confidence document — it tells estate agents and sellers that you're a credible buyer and gives you a working number to budget against. Crucially, the MIP is calculated as: **income × the lender's multiple, capped by affordability and LTV criteria**. The lender's own money is the only thing being quoted. Your deposit is not part of the calculation and is not part of the figure shown on the MIP certificate. ## How the maths actually works First-time buyers · keep reading - [House buying timeline What actually happens — and how long it takes — between offer accepted and keys. ](/house-buying-timeline) - [£300k home loan Salary, deposit, monthly cost and stamp duty for a £300,000 mortgage. ](/300k-home-loan) Browse the full hub: [Mortgages explained](/mortgages) Want a vetted broker to help with How the maths actually works? Free FCA-regulated introduction. We carefully check the broker matches your scenario — no pressure, no upfront fees. [Match me with a broker](/find-a-mortgage-broker) Let's run a typical first-time-buyer example to make the relationship concrete. - Combined income: £60,000. - Lender's income multiple: 4.5×. - Indicative maximum loan: £270,000. - Your deposit: £30,000. - MIP issued: £270,000. That £270,000 MIP figure is the _loan_. Your total purchase budget is £270,000 + £30,000 deposit = £300,000. If you make a £300,000 offer, the lender will fund £270,000 (a 90% LTV mortgage) and you'll fund the remaining £30,000 yourself. If you misread the MIP as "your whole budget" and offered £270,000 on the same property, you'd actually be over-buying relative to the loan: you'd need a £240,000 loan, your £30,000 would still cover the deposit, but you'd have given up £30,000 of buying power that the lender was already willing to provide. ## Don't forget the buying costs Want a vetted broker to help with Don't forget the buying costs? Free FCA-regulated introduction. We carefully check the broker matches your scenario — no pressure, no upfront fees. [Match me with a broker](/find-a-mortgage-broker) The MIP-plus-deposit number is your gross budget. Your _net_ purchase budget is lower because you need to keep cash back for the costs of completing the purchase: - **Stamp Duty** — none for most FTBs buying at or below £425,000 in England; surcharges apply on additional properties and on purchases above the threshold. - **Conveyancing** — typically £900–£1,800 including disbursements. - **Mortgage product fee** — £0–£1,999 depending on the deal. - **Valuation** — often free on residential remortgages; £200–£900 on purchases. - **Broker fee** — £0–£999 depending on the firm. - **Surveys** — £400–£1,500 for HomeBuyer or Building Surveys (optional but recommended). - **Removals and incidentals** — £500–£2,000. For a £300,000 FTB purchase, plan on £3,000–£6,000 of buying costs. That comes out of your deposit pot, not the loan, so the cash you need at the start is your deposit _plus_ these costs. ## What lenders check at MIP stage First-time buyers · keep reading - [Help to Buy calculator Equity loan repayment maths and the schemes that replaced Help to Buy in England. ](/help-to-buy-calculator-mortgage) - [No deposit mortgage Every active UK 100% LTV product and the trade-offs that decide fit. ](/no-deposit-mortgage) Browse the full hub: [Mortgages explained](/mortgages) Want a vetted broker to help with What lenders check at MIP stage? Free FCA-regulated introduction. We carefully check the broker matches your scenario — no pressure, no upfront fees. [Match me with a broker](/find-a-mortgage-broker) An MIP is intentionally light-touch. The lender typically verifies: - Identity (name, date of birth, address). - Income figure (declared, not yet evidenced). - Outgoings and existing credit commitments. - Credit footprint via a soft search. - Deposit existence — yes/no, plus rough amount and source category. What lenders _don't_ typically do at MIP stage: pull your full bank statements, verify your payslips line by line, run a property valuation, or do a hard credit search. All of that happens at full application, which is why an MIP can occasionally be reduced or withdrawn when the full case is underwritten. ## How deposit size influences the MIP indirectly Want a vetted broker to help with How deposit size influences the MIP indirectly? Free FCA-regulated introduction. We carefully check the broker matches your scenario — no pressure, no upfront fees. [Match me with a broker](/find-a-mortgage-broker) While the deposit isn't _inside_ the MIP figure, the size of your deposit can influence the MIP figure the lender is willing to issue. Here's why: - **Cheaper rates at lower LTVs.** A 75% LTV mortgage carries a lower rate than a 95% LTV mortgage. Lenders stress-test affordability at the actual rate plus a buffer — so a smaller loan at a cheaper rate passes affordability more easily, sometimes letting the lender offer a higher maximum loan. - **Removing the LTV cap.** Some lenders cap the maximum loan size at high LTVs (e.g. £570,000 above 90% LTV). A larger deposit moves you below the cap. - **Income multiple uplifts.** A handful of lenders offer 5× to 5.5× income multiples on lower-LTV applications, where 4.5× would apply at higher LTVs. ## Common pitfalls First-time buyers · keep reading - [FTB affordability rules 2026 The three affordability tests, stress rates and LTI limits shaping 2026 budgets. ](/first-time-buyer-affordability-rules-2026) - [High income multiple mortgages Enhanced and professional schemes that lift a first-time buyer budget. ](/first-time-buyer-high-income-multiple-mortgage) Browse the full hub: [Mortgages explained](/mortgages) Want a vetted broker to help with Common pitfalls? Free FCA-regulated introduction. We carefully check the broker matches your scenario — no pressure, no upfront fees. [Match me with a broker](/find-a-mortgage-broker) ### Reading the MIP as the offer price ceiling Offer up to MIP + deposit, not just MIP. Sellers and agents notice the difference. ### Not adding the deposit to your search filters Property portal filters take the maximum purchase price — that's MIP + deposit, not MIP alone. Filter incorrectly and you'll miss perfectly affordable homes. ### Treating the MIP as a guarantee It isn't. The full application can adjust the figure up or down once income, deposit and property valuation are verified. A drop in income, a new credit commitment or an under-valuation can all change the picture. ### Letting the MIP expire Most are valid 30–90 days. Renewals usually re-run the soft search rather than a full underwrite, but lender criteria can change in the gap. ### Pros - Gives sellers and agents confidence in your offer. - Sets a realistic working budget without committing to a lender. - Soft search only — no impact on your credit file at this stage. - Helps surface affordability issues before you fall in love with a property. - Quick to obtain — often issued within minutes online. ### Cons - Not a binding offer — the full application can change the figure. - Easy to misread as the whole purchase budget when it's the loan only. - Multiple MIPs in quick succession can leave footprints visible to some lenders. - Doesn't include any property-specific assessment — only your personal numbers. - Expires — typically 30–90 days. Vetted UK Broker Match ### Speak with a vetted mortgage broker about getting a Mortgage in Principle that reflects your real budget Free, no-obligation introduction to an FCA-regulated adviser with experience in your specific scenario. We've done the due diligence so you don't have to. - FCA-regulated only - Typical reply in 1 working day - No upfront fees [Match me with a broker](/find-a-mortgage-broker) ## The simple formula to remember Want a vetted broker to help with The simple formula to remember? Free FCA-regulated introduction. We carefully check the broker matches your scenario — no pressure, no upfront fees. [Match me with a broker](/find-a-mortgage-broker) > **Maximum offer price = MIP + deposit.** Then subtract buying costs to get your true net spending budget on a property. That single equation prevents almost every common MIP-related buying mistake. ## Frequently asked questions ### Does a mortgage in principle include your deposit? ### How do I work out my total purchase budget from an MIP? ### Is the deposit subtracted from the MIP figure? ### Why doesn't the MIP include the deposit? ### Will the lender check my deposit at MIP stage? ### Can I increase my MIP by putting down a bigger deposit? ## Related guides [ ### UK Mortgages Hub How residential mortgages work from MIP through to completion. Read guide ](/mortgages)[ ### Mortgage Calculators Repayment, affordability, LTV and stamp duty calculators. Read guide ](/mortgage-calculators)[ ### Find a Mortgage Broker Speak to a vetted UK broker to get an accurate MIP first time. Read guide ](/find-a-mortgage-broker) First Rung Now Independent UK mortgage education and broker matching. We don't sell mortgages — we help you understand them, then connect you with vetted advisers. 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