CIS Mortgages Explained

There aren’t any mortgage products specifically created for Construction Industry Scheme (CIS) contractors. The term “CIS mortgage” is simply used to describe a mortgage for someone paid under the scheme.

If you’re self-employed in the construction industry (e.g., a builder or electrician) and work for a contractor who deducts tax from your payments, you’re likely under the CIS. Registered subcontractors have 20% deducted, while unregistered ones face a higher 30% deduction. Regardless of your CIS status, you’ll still need to file a self-assessment tax return annually, and higher-rate taxpayers may owe additional tax on top of these deductions

If you’re registered with the scheme, the other criteria for a mortgage application aren’t significantly different from standard self-employed applications. Just to be clear – if you’re not CIS registered, of course, you can still get a mortgage, it’s just that your income may be calculated differently.

• CIS payslips/proof of income  – Lenders assess CIS income differently depending on whether you’re treated as employed or self-employed. If you’re paid by a single contractor and don’t handle your own tax, some may accept 3 to 12 months of CIS payslips and bank statements. If you’re classed as self-employed, you’ll typically need at least one full year of tax returns. Policies vary, and classification depends on your setup, but we can help match you with the right lender for your circumstances.

• Age – Most lenders require applicants to be between 21 and 75 years old. Some may accept older applicants if other criteria are met.

• Deposit – Generally, the larger your deposit and the lower your loan-to-value (LTV) ratio, the more you can borrow. Lenders often look for a minimum deposit of 10%, though some may accept 5% in certain cases. A better LTV typically leads to more favourable interest rates.

• Credit history – Lenders will assess your credit report to determine the risk involved in lending to you. The fewer issues on your credit file, the more mortgage options you’re likely to have. However, if you’ve had credit problems recently, that doesn’t necessarily mean you can’t get a mortgage.

If you’re paid under the CIS scheme, some lenders will assess how much you can borrow based on the gross income shown on your payslips (before the 20% deduction), rather than using average net profit from trading accounts or SA302 tax returns, which is the usual approach for self-employed applicants. This can significantly improve your borrowing potential and approval chances.

It’s also important to note that some lenders are happy with a shorter CIS history than they otherwise would be for self-employed borrowers. You might have more lenders to choose from as someone who has been paid under CIS for 6 months than someone who has been a sole trader for 12 months.

The main advantage for CIS workers is that their gross annual income may be considerably higher than the net profit declared to HMRC, especially after expenses. This allows you to potentially borrow more. It’s also helpful if you haven’t been self-employed for long, as many lenders will only require 12 months of CIS payslips rather than several years of accounts.

It’s still possible to get a mortgage even if you’ve only recently started being paid under the Construction Industry Scheme (CIS). Lenders will typically look for prior experience in the same type of work, a stable income history before joining CIS, and ideally a good credit score (though that’s not always essential). You’ll also usually need a deposit of at least 5% of the property’s value.

Don’t let your circumstances stop you from enquiring. We work with CIS subcontractors all the time, and 3 of our expert team are dedicated to this type of mortgage.

Yes, CIS workers can apply for all the usual types of mortgages, including buy-to-let, remortgages, and first-time buyer deals. Standard eligibility criteria still apply, but the key difference is how your income is assessed.

Because policies vary widely, speaking to a mortgage advisor who understands CIS is the best way to avoid declined applications and find the right lender for your situation. We have experts dedicated to this type of mortgage, and we help people like you all the time.

Contact us today to see how we can help you.

We have experts dedicated to helping applicants just like you – it’s what we do every day.

Many lenders are broker-only, meaning you won’t be able to access their deals directly. Our advisors have access to the whole market, including these exclusive lenders, and know exactly which ones are most likely to approve your application based on your CIS income. 

We’ll guide you through every step of the process, from gathering the paperwork to submitting a strong application, helping to maximise your chances of approval and secure the best possible deal. Chat with one of the team today.