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CIS mortgages explained
CIS mortgages allow construction industry workers to borrow more than they are otherwise able to.
CIS mortgages are for individuals registered with the Construction Industry Scheme (CIS). With a CIS mortgage, the amount you can borrow is based on your net income, rather than your net profit.
This is useful because many construction workers write off expenses against their income for tax purposes, reducing their net profit and therefore the amount that a traditional mortgage provider will lend them.
Instead of providing three years’ worth of accounts, you only need to show your net income from your payslips.
Think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
Who is eligible for a CIS mortgage?
If you’re a construction worker or you own a business that takes part in construction work, you can register for the Construction Industry Scheme (CIS).
It’s not compulsory for everyone to register, but you’ll save money on tax by doing so. You must be CIS-registered to qualify for a CIS mortgage.
To be accepted, you’ll need to provide six months of CIS payslips (taxed at the CIS rate of 20%) and six months of bank statements, although it could benefit your application if you provide more. The minimum deposit for a CIS mortgage is 5% of your desired property’s value, although you could be approved for a better deal with a bigger deposit.
How to apply for a CIS mortgage?
Not all lenders offer CIS mortgages. The best way to find a provider that offers a suitable deal is via a professional mortgage adviser. These individuals will be able to offer useful advice on how to find the best deal for your circumstances.
The application process is the same as it is for a traditional mortgage. You can apply directly to the lender or via a mortgage broker.
CIS mortgage providers will calculate the amount that you can borrow by multiplying your annual net income (usually by four or five, but this is dependent on the lender and your individual circumstances).
CIS mortgages with bad credit
If you have a bad credit score, you can still be approved for a CIS mortgage. Many lenders will still offer you a great deal, provided that you’ve had no defaults or CCJs in the previous 24 months. Learn more about getting a mortgage with CCJs or defaults.
Pros and cons of a CIS mortgage
Pros
- You may be approved for a larger mortgage amount, especially if you write off expenses for tax purposes.
- You may be approved for a good rate, even if you have a poor credit score.
Cons
- There are a limited number of providers that offer CIS mortgages.
- Traditional lenders may be able to offer you a better mortgage rate.
Bottom line
Although providers are in the minority, CIS mortgages work well for those with a weaker credit score. It’s not guaranteed that you’ll get a cheaper mortgage rate with a CIS mortgage, so be sure to explore your options with a traditional lender before you commit.
Finder survey: Do you know what can harm your chances of getting a mortgage?
| Response | 55+ | 45-54 | 35-44 | 25-34 | 16-24 |
|---|---|---|---|---|---|
| No | 54.02% | 46.2% | 45.76% | 40.99% | 48.54% |
| Yes | 45.98% | 53.8% | 54.24% | 59.01% | 51.46% |
Source: Finder survey by Censuswide of 1032 Brits, December 2023
We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you. Most of the data in Finder's comparison tables has the source: Moneyfacts Group PLC. In other cases, Finder has sourced data directly from providers.
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