Deposit for Self Certification

Important notice

We are currently unable to arrange self certification mortgages.

One of the consequences of the Banking credit crisis is that mortgage lenders have withdrawn from this type of lending.

We will be watching for any development in this area

Most self certification lenders require a minimum 25% deposit

The minimum deposit you will need for a self certified mortgage is currently 20% of the purchase price for a self employed or employed applicant.

For example, if the purchase price is £180,000 a 25% deposit will be £45,000.

The mortgage interest rates will improve if you are able to increase the deposit. 

Mortgage lenders generally use incremental bands of 5% for the deposit.  Lenders will round down to the nearest 5%, so if you have a 22% or 23% deposit, you will be offered the same deals as would be available for a 20% deposit.  In this situation you would get a better deal if you were able to increase the deposit to 25%.

You should put down the largest deposit that you can comfortably afford.

As well as the deposit, your savings will need to cover the legal costs, stamp duty and moving costs.  You should leave sufficient funds to cover all these items.  It would be sensible for you to allow a surplus for unexpected expenses.

A 25% deposit will give you access to the majority of self certification mortgage schemes.  There may be no benefit to you in terms of rates if you put down a larger deposit. 

The larger the deposit, the smaller the loan amount.  This will obviously translate into lower mortgage payments.

It is good practice to hold an emergency fund of 2 to 3 months income.  This fund may help you if you were to lose your job or have any emergency expense to meet, for example, car repairs.

Source of Deposit.  Mortgage lenders will be interested in the source of your deposit.  For most people the deposit will come from savings or from equity release form the sale of a property.  Mortgage lenders may require evidence of your deposit.