Today, I’m diving deep into CIS mortgages—a crucial topic for those of you working in the construction industry. If you’re a CIS subcontractor struggling to get on the property ladder or looking to remortgage, this comprehensive guide is for you.

What exactly is a CIS mortgage?

Let me cut straight to the chase. A CIS mortgage isn’t a special type of mortgage product—it’s a standard mortgage adapted to suit Construction Industry Scheme (CIS) workers. The CIS is a tax system specifically designed for the construction industry, where contractors deduct tax from subcontractors’ payments and pass it directly to HMRC.

The challenge many CIS workers face is proving their income to mortgage lenders. Unlike traditional employees with regular payslips, CIS subcontractors work differently—and this can make mortgage applications unnecessarily complex.

Who qualifies for a CIS mortgage?

You might be eligible for a CIS mortgage if:

• You’re registered with HMRC under the Construction Industry Scheme
• You work as a subcontractor in the construction industry
• You receive payment through the CIS system, with tax deducted at source
• You have at least 12 months history of working in the construction industry (though some lenders may want longer)

The big benefit? Many specialist lenders will consider your gross income before CIS deductions when assessing affordability—potentially significantly increasing how much you can borrow.

How CIS mortgage assessments differ from standard mortgages

Here’s where things get interesting. With traditional employment, lenders simply look at your annual salary. For CIS workers, it’s more complex but potentially more favourable.

When assessing your income, specialist CIS mortgage lenders can use:

• Your gross CIS income (before tax deductions)
• An average of your earnings over 12 months (some use 24 months)
• Business bank statements and CIS payslips to verify your income

The crucial difference is that many lenders will accept your gross income without requiring you to prove all your expenses—a significant advantage over self-employed mortgage applications where your taxable profit (after expenses) would typically be used.

How much can CIS subcontractors borrow?

Most specialist lenders will offer between 4-5 times your annual gross income. So, if your gross CIS income averages £40,000 per year, you could potentially borrow between £160,000 and £200,000.

Let’s look at a practical example: A bricklayer earning £200 per day working 5 days a week for 48 weeks a year would have a gross income of £48,000. At 4.5 times income, they could potentially borrow £216,000—significantly more than if assessed on their net taxable profit after expenses.

Documentation needed for CIS mortgage applications

Getting your paperwork in order is essential. You’ll typically need to provide:

• 3-6 months of CIS payslips
• 3-6 months of personal bank statements
• Proof of your CIS UTR (Unique Taxpayer Reference) number
• Latest SA302 tax calculation and tax year overview from HMRC
• Proof of ID and address
• Proof of deposit
• Details of any existing credit commitments

Top tip: Make sure your bank statements match up with your CIS income. Lenders will want to see your CIS payments hitting your account regularly.

Common challenges CIS workers face when applying for mortgages

Despite specialist options being available, CIS workers still face several hurdles:

1. Limited CIS history: Most lenders prefer at least 12 months of continuous CIS work history
2. Irregular work patterns: Seasonal fluctuations or gaps in employment can raise concerns
3. Credit issues: Many construction workers have minor credit blips that can complicate applications
4. Deposit requirements: Some lenders require larger deposits from CIS applicants
5. Limited high street options: Many mainstream banks don’t cater well to CIS workers

Specialist vs high street lenders for CIS mortgages

Should you go to your local bank branch or seek out a specialist? The answer, in most cases, is clear.

High street banks often:

• Use rigid affordability models
• Consider only your net taxable profit
• Lack of understanding of how CIS works
• Require more documentation
• Offer less flexibility on lending criteria

Specialist lenders understand the CIS system and:

• Consider your gross CIS income.
• Have more flexible affordability assessments.
• Offer tailored products for the construction industry.
• May accept shorter trading histories
• Can be more understanding about minor credit issues

Finding the right CIS mortgage deal

Now for my classic money-saving advice—shop around! Rates and criteria vary significantly between lenders. The best deals are often found through:

1. Specialist mortgage brokers: Advisers with specific CIS experience can access lenders not available directly to the public
2. Whole-of-market comparison: Don’t settle for the first offer—compare terms from multiple lenders
3. Looking beyond the headline rate: Consider arrangement fees, flexibility, and overpayment options

Important: Standard comparison sites rarely show specialist CIS mortgage options. A broker with CIS expertise will almost always find you better deals than going direct.

Tips to improve your CIS mortgage application

Want to maximize your chances of approval? Follow these steps:

1. Register as a CIS worker properly: Ensure all your CIS documentation is in order with HMRC
2. Build up a solid work history: Try to maintain at least 12 months of continuous CIS employment
3. Save a larger deposit: Aim for at least 10-15% to access better rates
4. Check your credit report: Fix any errors and address credit issues before applying, obtain your report here.
5. Reduce existing debts: Lower debt levels will improve your affordability assessment
6. Keep your accounts clean: Avoid large cash withdrawals or gambling transactions
7. Get professional advice: Work with a mortgage broker who specializes in CIS mortgages

CIS remortgaging options

Already have a mortgage but working under CIS? When your fixed rate ends, you could potentially:

• Remortgage to a better rate using your CIS income
• Release equity for home improvements
• Consolidate other debts (though be careful about extending short-term debt over the long term)

Many CIS workers find they can actually borrow more when remortgaging than they could on their original application, especially if their day rate or work consistency has improved.

The bottom line on CIS mortgages

The construction industry keeps our economy building, yet many hardworking CIS subcontractors still face unnecessary barriers to homeownership. The good news is that the mortgage market has evolved, with more lenders now understanding and accommodating the unique circumstances of CIS workers.

With the right approach and specialist advice, your CIS income can be fully recognized—potentially allowing you to borrow more than you might have thought possible.

Remember these key points:

• CIS mortgages aren’t special products—they’re standard mortgages from lenders who understand CIS income
• Your gross income before tax deductions can often be used for affordability
• Specialist mortgage brokers usually offer the best route to finding appropriate lenders
• Documentation and a clean financial footprint are crucial to successful applications

Whether you’re a bricklayer, carpenter, electrician, or any other construction trade, don’t let myths about CIS mortgages prevent you from exploring your options. With specialist advice and the right preparation, that dream home could be more achievable than you think.

If you need guidance, working with an experienced mortgage broker can help you navigate the process smoothly and secure the best possible deal for your circumstances. With the right guidance and preparation, that’s where The Mortgage Blog can help turn your dreams into reality. Contact us on 0333 335 6595 or message us to explore your options and get personalised advice tailored to your unique situation.