CIS Mortgages: How Construction Subcontractors Borrow More Than Their Tax Return Shows

A CIS mortgage is a residential mortgage arranged for a construction subcontractor who is paid under HMRC’s Construction Industry Scheme, assessed on gross day or week rate rather than the low net profit on their tax return. Specialist lenders read your gross income before the 20% CIS deduction, which usually lets you borrow far more than a high street bank would offer.

This is the calculation every CIS subcontractor should understand before they apply. Your accountant did their job and minimised your tax bill. In doing so, they accidentally shrank the income figure a mainstream lender sees. The fix is a lender who assesses the scheme correctly, and a whole-of-market broker who knows which ones do.

Written by Jake Stott, founder of Knox Mortgages. Last reviewed July 2026.

What is a CIS mortgage?

A CIS mortgage is a normal residential mortgage placed with a lender that assesses income under the Construction Industry Scheme. Under CIS, a contractor deducts tax at source from a subcontractor’s labour before paying them. The deduction is 20% for a registered and verified subcontractor, 30% for one who is not registered or verified, and 0% for a subcontractor holding gross payment status.

That deduction is a payment on account of your Income Tax and National Insurance, not a final tax. Materials are excluded from the deduction; only the labour element is taxed at source. The problem is not the scheme itself. The problem is that most high street lenders read the net profit figure on your SA302 tax calculation, which sits well below your gross earnings once your accountant has applied expenses and the CIS deductions have been accounted for.

CIS deduction rate	Applies to
20%	Subcontractors registered and verified under CIS
30%	Subcontractors not registered or not verified
0%	Subcontractors with gross payment status

Can you get a mortgage on CIS?

Yes. CIS subcontractors can get residential and buy-to-let mortgages, and often at high street rates through the right lender. Being paid under CIS is not a black mark; it simply changes how a lender should read your income. The mistake most subcontractors make is applying to a mainstream bank that treats them as self-employed and asks for two or three years of SA302 tax calculations showing a modest net profit.

A specialist CIS lender takes a different route. It assesses your gross day or week rate from your CIS payslips, vouchers or bank statements, then annualises it. This is the same principle used for day-rate contractor mortgages, but applied to the construction trade. The result is usually a materially larger loan on the same income, because the lender is reading your true earning power rather than a tax-optimised profit figure.

How much can I borrow on a CIS mortgage?

Most specialist CIS lenders lend 4.5 to 5.5 times your annualised gross income. They calculate that income by taking your gross weekly or daily rate and multiplying it across a working year, typically 46 to 48 weeks, rather than reading your SA302 net profit. This single mechanic is why a CIS mortgage can be worth two to three times what a high street bank quotes on the same earnings.

Here is a worked example. A subcontractor invoices £900 per week gross for their labour. Annualised over 47 working weeks, that is £42,300 of gross income. At a 4.75 times multiple, a specialist lender assesses borrowing of roughly £200,900. The same worker’s accountant, applying tools, van, travel and other allowable expenses, might declare a net profit of £20,000 on the SA302. A high street lender reading that figure at 4.5 times offers around £90,000.

Assessment basis	Income figure used	Multiple	Approximate borrowing
High street lender (reads SA302 net profit)	£20,000	4.5x	£90,000
Specialist CIS lender (reads gross day rate)	£42,300	4.75x	£200,900

Same subcontractor, same earnings, a borrowing gap of over £110,000. That is the entire point of placing a CIS case correctly. You can see the general mechanics on our how much can I borrow and affordability guides, but the CIS-specific uplift comes from the gross-rate assessment.

What is a CIS statement for a mortgage?

A CIS statement, sometimes called a CIS voucher or payment and deduction statement, is the document your contractor gives you each pay period showing your gross pay, the labour and materials split, and the CIS tax deducted. For a mortgage, these statements are the primary evidence of your gross income, which is the figure a specialist lender wants to see.

Lenders typically ask for the last 3 to 6 months of CIS statements or payslips, backed by bank statements showing the payments landing. Some will also want one to two years of SA302 tax calculations and the matching tax year overviews, plus proof of continuous CIS work such as a contract or a track record with regular contractors. You will also need ID and evidence of your deposit source. Our mortgage document checklist covers the full list.

Document	Why the lender wants it
3 to 6 months of CIS statements or payslips	Proves your gross weekly or daily rate
3 to 6 months of bank statements	Confirms the income actually landing
1 to 2 years SA302 and tax year overviews	Backup evidence for some lenders
Contract or proof of continuous CIS work	Shows the income is stable and ongoing
ID and proof of deposit	Standard anti-money-laundering checks

What deposit do you need for a CIS mortgage?

Most CIS subcontractors with clean credit need a deposit of 5% to 10% of the property price, the same range as any employed applicant. There is no CIS penalty on deposit for a straightforward case. The gross-rate assessment described above is what unlocks the borrowing, not a larger deposit.

A larger deposit becomes relevant in two situations. If you have adverse credit, specialist lenders will often still lend but may want 10% to 15% and price the rate slightly higher. If you are new to CIS with a short trading history, a lender assessing you on current rate alone may also ask for a bigger deposit to offset the shorter track record. In both cases the trade-off is usually worth it, because the alternative is being declined or under-lent by a mainstream bank.

Can you get a CIS mortgage with bad credit?

Yes. Specialist lenders assess adverse credit case by case rather than applying a blanket decline. A single missed payment, a settled default, a historic CCJ or an IVA does not automatically rule you out, though it will usually mean a higher rate and a larger deposit, often 10% to 15%. The lender looks at the story: what happened, when, whether it is resolved, and how your finances look now.

The combination of CIS income and adverse credit is exactly where a whole-of-market broker earns their fee, because placing the case with the wrong lender guarantees a decline on both counts. If your credit history is the sticking point, read our guides on a mortgage with a CCJ and improving your credit score alongside your CIS assessment.

What if you are new to CIS or have less than 12 months of accounts?

You can still get a CIS mortgage with less than a year of history. A group of specialist lenders will assess you on your current gross day or week rate with as little as three to six months of CIS statements, provided the work looks continuous and the rate is credible for your trade. This is a real advantage of the CIS route over standard self-employed lending, which usually demands two or three full years of accounts.

The trade-off for a short history is a narrower panel of lenders and, sometimes, a slightly higher rate or larger deposit. If you are also buying your first home, the same principle applies through our self-employed first-time buyer route. The key is matching your specific history to a lender whose criteria fit, which is a placement decision, not a form-filling exercise.

The protection every CIS subcontractor needs and no employer provides

CIS subcontractors have no employer sick pay and no death-in-service cover, so income protection and life cover are not optional extras; they are the safety net a payslip employee gets for free. If you cannot work, there is no statutory sick pay from a boss and no salary continuing in the background. Your mortgage still needs paying.

Two products close that gap. Income protection replaces a percentage of your income if illness or injury stops you working, paying out monthly until you recover or retire. Life insurance clears the mortgage if you die, so your family keeps the home. For a self-employed trade with physical risk and no corporate cushion, income protection is arguably more important than for anyone else. We build this into the advice rather than selling it as an afterthought.

What happens after you apply for a CIS mortgage?

Once your case is placed with the right lender, the process runs like any other mortgage: agreement in principle, full application with your CIS statements and bank statements, valuation, then a formal mortgage offer, usually within two to six weeks depending on the lender and the valuation. The difference with CIS is entirely at the placement stage, where the wrong lender choice is what causes most declines.

CIS cases get declined for predictable reasons: applying to a high street bank that reads net profit, gaps in the CIS statement trail, income that cannot be evidenced, or credit issues placed with a lender that will not tolerate them. Every one of these is avoidable with the right lender selected up front. That is the whole value of whole-of-market advice under the FCA’s mortgage conduct rules: your case goes to a lender that will say yes the first time.

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CIS mortgage FAQs

Can you get a mortgage on CIS?

Yes. CIS subcontractors can get residential and buy-to-let mortgages, often at high street rates, through a lender that assesses gross day or week rate rather than SA302 net profit. Being paid under the Construction Industry Scheme is not a barrier; applying to the wrong type of lender is.

How much can I borrow on a CIS mortgage?

Most specialist CIS lenders lend 4.5 to 5.5 times your annualised gross income. A subcontractor on £900 per week gross, annualised over 47 weeks to £42,300, could borrow roughly £200,900 at 4.75 times, versus around £90,000 if a high street lender read a £20,000 net profit on their tax return.

What is CIS and how does it work?

CIS is HMRC’s Construction Industry Scheme. Contractors deduct tax at source from a subcontractor’s labour before paying them: 20% if registered, 30% if not registered or verified, and 0% with gross payment status. The deduction is a payment on account of your Income Tax and National Insurance, not a final tax.

What is a CIS statement for a mortgage?

A CIS statement, or CIS voucher, is the payment and deduction statement your contractor issues each pay period showing gross pay, the labour and materials split, and the tax deducted. Lenders use it as the primary proof of your gross income, usually asking for the last 3 to 6 months.

Do CIS subcontractors pay higher mortgage rates?

Not necessarily. Clean CIS cases often secure high street rates through the right lender. Rates only rise where there is adverse credit, a very short trading history, or an unusual case. Even where a specialist rate sits slightly higher, the larger loan you can access usually outweighs the small rate difference.

Can I get a CIS mortgage with only one year of accounts?

Yes. Several specialist lenders assess CIS applicants on their current gross rate with as little as three to six months of CIS statements, provided the work is continuous. This is more flexible than standard self-employed lending, which typically requires two or three full years of accounts.

What deposit do I need for a CIS mortgage?

Most CIS subcontractors with clean credit need a 5% to 10% deposit, the same as an employed applicant. A larger deposit of 10% to 15% may be required with adverse credit or a short CIS trading history, but there is no CIS penalty on deposit for a straightforward case.

Should CIS subcontractors get income protection?

Yes, more so than most. CIS subcontractors have no employer sick pay and no death-in-service cover, so income protection and life insurance replace the safety net an employee gets for free. If illness stops you working, income protection pays a monthly benefit so the mortgage still gets paid.

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