This mortgage type was conceived (primarily) for people who are self-employed and have difficulty in proving that their income is enough to cover their mortgage repayments.

This can be down to the fact that the self employed person has not been trading for long enough, have more than one job, or rely on bonuses for a large part of their overall salary.

Borrowers who go down the self certification route assess their own income and then decide how much they can afford to repay based on the results.

In recognition of the higher risk involved in lending, the rates charged tend to be higher than standard mortgage deals (1% or sometimes even slightly higher). In addition the arrangement fees tend to be higher, and the proportion of the value of the property which can be borrowed (the Loan to Value or LTV) can be lower.

Self-cert mortgages are seen by certain people/ organisations as being controversial though. The Financial Services Authority (FSA) has expressed worry over the potential for fraudulent applications as by the very definition people authorise their own incomes and therefore could inflate this income to obtain a higher mortgage.

It is important that borrowers do not overstate their income in order to get a larger loan, as this could put their property at risk (as they may not be able to afford it) and damage their credit history yet further. The individual would also be committing a fraud and could end up with a criminal record as a result.

For some a self certification mortgage is ideal and deals for self-cert mortgages are getting cheaper these days.