This is great for people who do not want to pay no more than a certain amount every month when making self cert mortgage repayments. If the lender standard variable rate is below the amount you have capped then you must pay that amount.

The capped rate term can be between 1-5 years, on average you will find many around the five year mark. This guarantees the lender you business for a longer term, if you were to switch mortgages in between you may have to pay redemption penalties which could be costly.

If interest rates go up you are protected against paying high amounts of repayments.

Unlike a fixed rate mortgage which fixes the repayment amount no matter what the base rate is, a capped mortgage will allow you to reduce you repayment amount according to the lower base rate.

The mortgage makes it easier to budget your mortgage for the next few years, when doing this always budget to the capped amount.

The rate that is payable on capped mortgages is still generally higher than a fixed or discounted mortgage.

You might find that discounted mortgage or fixed rate mortgage would offer you a better deal if the base rate has been low for a very long time. Also look at whether the difference in interest rates between the mortgages is big enough to make it beneficial.

Look at the redemption penalties as they could be more than other mortgage types. Always assess current and future situations when taking out a mortgage

If you would like more information regarding self certification mortgages fill in our enquiry form and one of our mortgage advisors will give you a call back. They will go through all the options which are available to you and help find the right mortgage for you.