CIS Mortgages Explained

Main guide

What is a CIS mortgage?

A CIS mortgage is not usually a separate mortgage product. It is a mortgage application for someone paid through the Construction Industry Scheme, often called CIS.

CIS is commonly used in the construction industry. Workers may be subcontractors and have tax deducted at source before they are paid. This can make their income look different from a standard employed applicant, even where they work regularly for the same contractor.

The main issue for a mortgage lender is how to evidence the income. Some lenders may treat CIS workers in a similar way to employed applicants if payslips are regular and clear. Others may use self-employed criteria and ask for tax calculations, tax year overviews or accounts.

Why CIS income needs the right lender

CIS workers can sometimes be caught between employed and self-employed rules. You may receive regular payslips, but you may also be technically self-employed for tax purposes.

This matters because different lenders can reach different borrowing figures. One lender may use your CIS payslips and assess gross income before tax deductions. Another may use your tax return figures or take a more cautious view.

For example, a CIS worker with regular weekly payslips may have stronger mortgage options with a lender that understands CIS income. A lender that insists on two years of self-employed accounts may produce a lower borrowing figure or may not fit the case.

The amount someone can borrow depends on income, outgoings, deposit, credit history, property type and lender criteria. Mortgage approval is not guaranteed.

Your home may be repossessed if you do not keep up repayments on your mortgage.

What documents do lenders ask CIS workers for?

The documents needed depend on how the lender treats CIS income. Some lenders focus on CIS payslips, while others ask for self-employed income evidence.

Lenders may ask for:

• recent CIS payslips
• bank statements showing income credits
• tax calculations or SA302s
• tax year overviews
• employment or contractor history
• details of current contractor
• proof of deposit
• identification and address history
• credit commitments and outgoings
• explanation of any gaps in work

Some lenders may ask for three months of CIS payslips. Others may want six or twelve months. If the lender treats you as self-employed, they may ask for one or two years of tax documents instead.

Regularity can help. If your payslips show steady income from the same contractor or consistent work across different contractors, the case may be easier to evidence. If income fluctuates, the lender may average it or ask for more information.

Bank statements are often important because they show the income reaching your account and help confirm regular commitments. Lenders may also review spending, existing debts and affordability.

It is important that the income used at Decision in Principle stage matches what the lender is likely to accept. If the income is entered incorrectly, the full application may produce a lower borrowing amount or be declined.

How lenders calculate CIS income

Lenders do not all calculate CIS income in the same way. Some may use gross CIS income from payslips, while others may use net profit or taxable income from self-assessment documents.

Using CIS payslips can sometimes produce a more realistic borrowing figure where income is regular. This is because the lender may assess the worker more like an employed applicant, even though they are paid under CIS.

Other lenders may prefer a self-employed approach. They may use the latest year’s tax calculation or average income over two years. If income has changed, they may ask why and take a more cautious view.

How long do you need to be CIS?

The length of CIS history required varies by lender. Some lenders may consider applicants with a shorter CIS history if they have worked in the construction industry for longer and the income is stable. Others may want a longer record of CIS payslips or tax documents.

Previous experience can matter. If you have been doing the same type of construction work for years but only recently moved onto CIS, some lenders may consider that background. This does not guarantee approval, but it can help explain the case.

Gaps in work and changing contractors

CIS workers may move between sites or contractors. Lenders understand that this can be normal in construction, but they still want to see that income is reliable.

Short gaps may be acceptable with some lenders, especially if there is a strong track record. Longer gaps, irregular income or frequent changes with no explanation may make the case more difficult.

If you have changed contractor recently, it can help to show previous payslips, bank statements or evidence of ongoing work.

Deposit, credit profile and affordability

CIS applicants still need to meet standard mortgage checks. Lenders will review deposit, credit history, existing commitments, dependants, property details and affordability.

A larger deposit can sometimes improve lender choice, but it does not guarantee approval. The mortgage still needs to be affordable and the income evidence must support the application.

If you have missed payments, defaults, CCJs or high unsecured debt, lender options may be more limited. Some lenders are more flexible than others, but criteria vary.

Common mistakes to avoid

A common mistake is assuming all lenders understand CIS income. Some do, but others may use a standard self-employed approach that does not suit your circumstances.

Another mistake is relying only on take-home pay without checking whether the lender uses gross CIS income, net income or tax return figures. This can change the borrowing amount.

It is also important to keep payslips and bank statements organised. Missing payslips, unclear income credits or inconsistent figures can delay the application.