Self-Certification Mortgage – Guide UK

A self-certification mortgage is basically a mortgage for those who cannot prove their income. Instead of proving their income borrowers state what their income is likely to be. A mortgage is then given on this basis. However a mortgage dealer may need evidence of accounts and bank statements to back up the claims, made by a potential borrower. Because of the risk attached in a self-certification mortgage they often attract a higher interest rates. Also to get a self-certification mortgage, it is usually necessary to give a bigger deposit. However if you can have put down a 25% deposit then the rates may become more competitive and only a little more expensive than a standard mortgage.

Self-Certification mortgages are good for those who are self employed and don’t have a regular pay check going into the bank. It can also be good for those who have income from various sources and for different reasons find it difficult to prove their income. A self-certification mortgage is known as a non standard mortgage. The number of firms offering self-certification mortgages is increasing and as a result the market is becoming more competitive. Often a self-certification mortgage is used as a temporary measure to help get on the housing market. After a few years you can switch to a more standard mortgage deal with a better interest rate.

Investigation into Self Certification Mortgages by the FSA

A BBC programmer aired in 2003-2004 alleged that self-certification mortgages were being abused with borrowers encouraged to lie about their income in order to get a bigger mortgage. They also went on to say that these inflated incomes were a significant cause of the booming housing market.

The financial Services authority launched an investigation into the self-certification market partly because of these concerns. With high levels of borrowing to incomes borrowers were very susceptible to a rise in interest rates and a failure to keep up with their mortgage payments.

A summary of the self – certification market found that generally people did not overstate their income, although there were a small number of cases where this did occur. The report said that to a mystery shopper 3 out of 41 firms would consider exaggerating income to help get a mortgage. Since this report generally mortgage dealers have become more stringent in allowing inflated claims of income.

One interesting point they raised is that in several cases people who had no difficulty in proving their income were not advised to get a standard mortgage which would have been a better deal.


  1. Self certification mortgages are good for those who stuggle to prove their income, especially self employed
  2. Self certification mortgages can be a good way to get on the housing market ladder.
  3. The market is becoming more competitive but generally if you can prove your income try get a standard mortgage first.
  4. Be wary of exaggerating  your income beyond reality. This can make it difficult to make payments in the future. You could be at risk of losing your home.
  5. Mortgage dealers in self-certification markets have been advised by FSA to look more closely into financial situation of those applying to make sure claims sound credible

See also fast track mortgages. Fast track mortgages are for those with a large deposit, in theory borrowers can be asked to prove income but often this is not the case.