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CIS Mortgage: How to Get a Mortgage on the Construction Industry Scheme

If you work in construction and get paid through the Construction Industry Scheme, getting a mortgage can feel more complicated than it should be. Most high street lenders do not fully understand how CIS income works, which means many subcontractors are told they cannot borrow enough or are turned away entirely.

The reality is very different. With the right lender and the right approach, CIS workers can secure competitive mortgage deals. In many cases, you can borrow significantly more than a traditional self employed applicant because of how CIS income is assessed.

This guide covers everything you need to know about CIS mortgages, from how lenders calculate your income to which documents you need and how to maximise your borrowing power.

What Is the Construction Industry Scheme?

The Construction Industry Scheme is a tax arrangement managed by HMRC. It applies to contractors and subcontractors working in the construction sector. Under CIS, the contractor you work for deducts tax at source before paying you. The standard deduction rate is 20% for registered subcontractors and 30% for those who are not registered.

The scheme covers most construction work including building, decorating, plumbing, electrical work, roofing, plastering, and demolition. It also covers some related trades such as heating and ventilation installation.

From a tax perspective, CIS subcontractors are classified as self employed. However, from a mortgage perspective, some lenders treat CIS income differently from standard self employment income, and this distinction is where the opportunity lies.

How Lenders Assess CIS Income

This is the most important part of the CIS mortgage process. There are two main ways lenders can assess your income, and the difference in borrowing power between them can be enormous.

Method 1: Self Assessment Figures (Net Profit)

Many high street lenders treat CIS subcontractors the same as any other self employed applicant. They ask for your SA302 tax calculations and tax year overviews, then base your mortgage on the net profit you declared to HMRC. After you have deducted materials, travel, tools, and other business expenses, this figure can be substantially lower than what you actually earned.

Method 2: Gross CIS Income (Day Rate Annualisation)

Specialist and CIS friendly lenders take a different approach. They look at your gross CIS income before expenses and before the 20% CIS tax deduction. They calculate your annual income by taking your average weekly or daily pay from your CIS payslips and multiplying it across the year.

The typical formula is: daily rate multiplied by 5 days, multiplied by 46 weeks. Some lenders use 48 weeks instead of 46.

For example, if your CIS payslips show you earn an average of 180 pounds per day gross, the annualised calculation would be 180 x 5 x 46, giving you an annual income of 41,400 pounds. A lender offering 4.5 times income would then consider a mortgage of up to 186,300 pounds.

Compare that to a self assessment approach where your declared net profit after expenses might be 28,000 pounds. At 4.5 times income, that gives you only 126,000 pounds. The gross income method could give you over 60,000 pounds more borrowing power in this example.

Gross Payment Status: An Added Advantage

Some CIS subcontractors hold Gross Payment Status. This means the contractor pays you the full amount without deducting the 20% CIS tax. You are then responsible for paying your own tax and National Insurance directly to HMRC.

To qualify for Gross Payment Status, you typically need to meet turnover thresholds (at least 30,000 pounds per year as a sole trader), have a clean compliance record with HMRC, and pass various business and identity checks.

From a mortgage perspective, Gross Payment Status can be helpful because your bank statements will show higher deposits each month. This makes it easier for lenders to verify your income, and the larger regular deposits strengthen your application. Some lenders view Gross Payment Status as evidence that you are an established, reliable subcontractor.

Documents You Will Need

The documents required depend on which type of lender you approach, but a comprehensive list includes the following.

CIS payslips or payment vouchers covering the last 3 to 12 months (depending on the lender)
Bank statements showing CIS payments being deposited, usually covering 3 to 6 months
SA302 tax calculations and tax year overviews for the last 1 to 2 years (required by some lenders)
Your Unique Taxpayer Reference (UTR) number
Proof of CIS registration
Identification documents such as passport and driving licence
Proof of address, usually utility bills or council tax statements
Details of your current contractor or contracts

Even if you are applying to a lender that uses the gross income method, it is worth having your SA302s available. A broker can advise on the best documents to submit for each specific lender.

How Many Months of CIS History Do You Need?

Requirements vary between lenders, but here is a general guide.

Some specialist lenders will consider applications with as little as 3 months of continuous CIS payslips. Most CIS friendly lenders prefer to see 6 to 12 months of CIS payment history. Traditional lenders that treat you as self employed may want 1 to 2 full tax years of accounts.

The advantage of using a lender that accepts shorter CIS histories is significant. Many construction workers move in and out of CIS work, or they may have recently started subcontracting after years of direct employment. With the right lender, you do not need to wait years before applying for a mortgage.

Which Lenders Accept CIS as Employed vs Self Employed?

Lenders fall into three broad categories when it comes to CIS income.

The first category includes lenders that treat CIS workers as employed for mortgage purposes. These lenders use your gross CIS income, payslips, and sometimes bank statements to assess affordability. They do not need self assessment figures. This approach typically results in the highest borrowing amounts.

The second category includes lenders that treat CIS workers as self employed. These lenders require SA302s and full tax returns. Your borrowing is based on declared net profit after expenses. This approach usually results in lower borrowing.

The third category includes lenders that offer a hybrid approach. They may accept either method and allow you or your broker to choose which income calculation produces the best outcome for your situation.

Specific lender names and criteria change regularly. A specialist broker will know which lenders currently offer the best terms for your circumstances.

Common Issues with CIS Mortgage Applications

Gaps Between Contracts

Construction work can be seasonal or project based. Gaps between contracts are one of the most common issues CIS workers face. Most lenders want to see relatively continuous work, but their tolerance for gaps varies. Some lenders accept gaps of up to 4 to 6 weeks between contracts. Others may decline applications if there are any significant gaps in the last 12 months. If you have seasonal gaps, a broker can identify lenders with more flexible criteria.

Multiple Contractors

Working for several different contractors during the year is normal in construction. However, some lenders prefer to see a stable relationship with one or two main contractors. If you regularly switch contractors, it helps to have continuous payslips throughout the period, even if the contractor name changes. Some lenders limit the number of employers you can have had in the last 12 months, sometimes to a maximum of 3.

Mixed Income

Some CIS workers also have other income sources, such as a part time employed role, rental income, or a partner’s salary. Not all lenders allow you to combine CIS income with other income types. A broker can identify lenders that accept combined income and ensure both sources are used to maximise your borrowing.

Bad Credit

Having adverse credit does not automatically disqualify you from getting a CIS mortgage. Several specialist lenders consider applications from CIS workers with previous defaults, CCJs, or missed payments. The rates may be higher, and a larger deposit is usually required, but options do exist.

Tips to Maximise Your Borrowing

Keep all your CIS payslips and vouchers organised. Missing payslips are a common reason for delays.
Ensure your CIS payments are deposited into a bank account in your name. Lenders want to see a clear trail from payslip to bank statement.
Minimise gaps between contracts where possible. Even short periods of other work can help maintain continuity.
Register for CIS if you have not already. Unregistered subcontractors face a 30% deduction instead of 20%, and fewer lenders will consider unregistered workers.
Consider applying for Gross Payment Status if you meet the criteria. It strengthens your application and improves cash flow.
Reduce personal debts before applying. Credit card balances, car finance, and personal loans all reduce the amount a lender will offer you.
Save the largest deposit you can. While some CIS friendly lenders accept 5% deposits, you will get better rates and more lender options with 10% to 15%.
Speak to a specialist mortgage broker before approaching any lender directly. A broker can match you with the right lender and present your income in the most favourable way.

CIS Mortgages for First Time Buyers

First time buyers working under CIS face the same challenges as other CIS applicants, with the added complication of having no property ownership history. The good news is that many CIS friendly lenders have no restrictions on first time buyers. Government schemes such as the Lifetime ISA can also be used alongside a CIS mortgage to boost your deposit.

If you are a first time buyer on CIS, read our guide to self employed first time buyers for additional advice on the home buying process.

Frequently Asked Questions

Can I get a mortgage on CIS with only 3 months of payslips?

Yes. Some specialist lenders accept as little as 3 months of continuous CIS payslips. However, having 6 to 12 months of history opens up more lender options and may result in better rates.

Do I need to provide tax returns for a CIS mortgage?

Not always. Lenders that treat CIS income as employed income typically assess your payslips and bank statements instead of SA302s. However, some lenders still require tax returns, so the answer depends on which lender you apply to.

How much can I borrow on a CIS mortgage?

Most lenders offer between 4 and 4.5 times your annual income. Some specialist lenders offer up to 5 or even 6 times income for applicants with strong profiles. The key factor is whether the lender uses your gross CIS income or your net self assessment profit.

Will the 20% CIS deduction reduce my borrowing?

Not with the right lender. CIS friendly lenders assess your gross income before the 20% deduction, so the tax withheld at source does not reduce your borrowing power.

Can I get a CIS mortgage with bad credit?

Yes. Several specialist lenders consider CIS applicants with adverse credit histories. A larger deposit and higher interest rates are usually required, but a broker can find options for most credit situations.

Is CIS income the same as self employed income?

For tax purposes, yes. CIS subcontractors are self employed and must complete a self assessment tax return. For mortgage purposes, some lenders treat CIS income differently and assess it based on gross payslips rather than self assessment profits.

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