If you are paid under the Construction Industry Scheme, whether you are a plumber, electrician, builder or any other CIS subcontractor, getting a mortgage can feel more complicated than it should. A lot of CIS contractors come to us assuming they will struggle, or that lenders will treat their income as second-class compared with a PAYE salary.
The good news is that it is very much achievable. CIS contractors get mortgages every week. It just helps to understand how lenders look at your income, what you will need to show, and where the common pitfalls are. This guide walks through it.
Can you get a mortgage as a CIS contractor?
Yes. Getting a mortgage as a CIS contractor is very viable. The way the income is assessed and the lenders we look at do take a more detailed approach depending on your experience and your earnings, but in general, a mortgage is absolutely something we can look to achieve.
The standard fields of work for CIS are construction-related: electricians, plumbers, builders and similar trades. A lot of the time when we deal with new developments, the contractors hired on those sites are exactly those types of CIS subcontractors. So this is a familiar route for us.
What is CIS, in a mortgage context?
The Construction Industry Scheme (CIS) is the way HMRC handles tax for self-employed subcontractors in construction. The contractor who hires you deducts a flat percentage of your pay before they pay you, typically 20% for registered subcontractors, and sends it directly to HMRC as an advance against your tax. You then complete a self-assessment tax return at the end of the year, where the actual tax you owe is reconciled.
For mortgage purposes, that creates a slightly hybrid picture. You are self-employed, but unlike a standard sole trader, you are paid through what looks a lot like a payslip, with regular weekly or monthly amounts and a clear gross figure on each one. That opens up a different approach with some lenders.
(20% is the standard CIS deduction for registered subcontractors. Subcontractors who are not registered are deducted at a higher rate.)
What do lenders want to know about someone paid under CIS?
The main things lenders want to understand are:
How long you have been doing the role. Six months to a year is ideal as a minimum.
Or, if it is less than that, how long you have been in the industry. So if you have been in your current role three months but you have been a plumber for a year, that is still useful context. It shows you have experience and can find work in your line.
How you are paid. The standard way CIS works is that you will receive weekly or monthly invoices or payslips, with the 20% flat deduction taken off. There are different ways lenders can assess what income they will actually use for you, depending on which lender we look at. That is where it pays to have a broker who knows the territory.
Do lenders see CIS income differently from PAYE or self-employed?
Yes. Anything with “contractor” attached to it, CIS included, tends to get a more cautious view from lenders, simply because of the logic of contracting. If your contract ends and you have no work lined up, you have no income. In a permanent role, you would usually have to be made redundant or the company shut down for that to happen, which is a different situation.
So contractors are always going to face a slightly more careful look at the income that can be used. That is why lenders want history in the role, or at least history in the line of work, to see that when one contract ends, you can find another.
The flip side is that the right lender will also give you credit for the way CIS pay actually works, and that can produce a much stronger income figure than a standard self-employed assessment.
Why are CIS payslips so important on a mortgage application?
Your CIS payslips are central to the assessment, especially because it is quite standard for CIS workers to have a day rate.
You will typically earn a fixed amount per day based on your contract, your level of experience and the work you are doing. Your payslips back that up. So if you work five days a week at £200 a day, your payslips will show £1,000 a week. Any overtime or additional earnings will show on top of that.
It is also common to have a fairly basic overall contract that simply states what you are working: 40 hours a week at £10 an hour, or five days a week at £100 a day, for example. Whatever the structure, there will usually be some sort of rate the payslips can demonstrate.
That gives the lender something concrete to work with: a verifiable, regular gross figure that can be annualised into an income.
How many CIS payslips do lenders need to see?
This varies meaningfully between lenders.
The lenders that will use CIS payslips as the basis for income are fewer in number than mainstream lenders, so the options can be more limited and very lender-specific. The main go-to is often Halifax, who will typically work from around three months (or 13 weeks if you are paid weekly) and annualise that across a year.
Other lenders work on the last 12 months, wanting to see all the consecutive payslips (weekly or monthly), and instead of using an average, they will add them together for an annual figure.
Some sit in the middle, working on the last six months and then scaling up.
What you will find, though, is that a lot of lenders will not use payslips at all. They will look at CIS income through tax returns and SA302s instead, which is more like a standard self-employed assessment. That is why getting matched with the right lender is the single biggest factor for a CIS contractor.
Gross income vs net income, why this matters most
This is the bit most CIS contractors do not realise.
Because you are deducted that flat 20% at source, the net figure on your CIS payslip is not actually a reflection of what you will really pay in tax. Your real tax position depends on your total earnings for the year, your tax band, your allowances, your expenses and so on. None of which is known until you do your year-end self-assessment.
That makes the net figure on a CIS payslip a generic placeholder rather than your true take-home position. So the gross figure, what you have actually earned before that flat deduction, is the more accurate reflection of your earning power.
As a general rule, lenders work on gross income. That is the case across the board, not just for CIS. Lenders do not take into account how much tax you are paying, what your National Insurance comes to, or what you are putting into a pension. They work on the gross.
For CIS contractors, that is actually good news. Your gross earnings are usually meaningfully higher than the net profit you would declare after expenses on a self-employed tax return, which is the figure standard self-employed mortgages get assessed against. Being able to use your gross CIS income with the right lender often opens up significantly more borrowing than you would get treated as standard self-employed.
What documents should I have ready before applying?
- CIS payslips. Six to 12 months' worth, with all the relevant slips to hand. Every payslip you have received, in order.
- Bank statements. Usually the last three to six months. Lenders want to see the credits going into your account to back up the payslips.
- Tax returns and SA302s. If you have been doing CIS for one to two years and have a tax return filed, having that alongside the payslips is genuinely useful. It opens up more lender options, because some lenders will not use payslips at all and will base everything on tax returns.
- ID and proof of address. Standard for any mortgage application. Passport or driving licence for ID; a recent utility bill, council tax bill or bank statement for address.
- Deposit evidence. Bank statements or a savings account showing the deposit funds, plus a paper trail if any of it has been gifted or transferred from another account.
What if I have just moved from PAYE to CIS?
This is a common scenario. You have been a plumber, an electrician or a builder in a PAYE role, and you have recently gone CIS in the same line of work.
The good news is that the history in the trade still counts. Lenders are not starting from zero just because the structure of your pay has changed. The challenge is that, as a standard, lenders want to see at least three months on CIS before they will consider you. And realistically, at three months, options are much more limited. Halifax is often the main option at that point, with most other lenders wanting six to 12 months of CIS history.
So if you are planning to make the switch from PAYE to CIS and a mortgage is on the horizon, the timing matters. Speaking to a broker before you make the change, not after, is one of the best decisions you can make.
How to improve your chances of getting a CIS mortgage
The main things are straightforward, and most of them apply to any mortgage, not just CIS:
- Build up history. The more time you have on CIS, the more lender options open up. Six to 12 months is usually the threshold where things become much more flexible.
- Keep your earnings consistent. A strong, steady income figure helps. Patchy or sharply declining months can pull your average down.
- Look after your credit file. Pay everything on time, do not miss payments, and only take on credit you genuinely need.
- Speak to a broker early. Especially in a more specialist line of work, the earlier you talk to someone, the better. The worst outcome is to find a house you love, get partway into the process, and then discover you cannot actually proceed, or that you need to wait six months. A short conversation upfront tells you what you are working with.
If you assume you will struggle, here is what to do
The single most important thing is to not assume you cannot. Have a chat first.
The first thing we want to do is assess your circumstances and your situation. It might be that you can go ahead now, or it might be that, in six, nine or 12 months, the picture changes meaningfully. At least that gives you a timeline to work with, rather than a vague “maybe”.
At some point, you will be in a position to get a mortgage. It just depends on when you are looking, what you are looking to buy, and what your circumstances are when you apply. We will work with you to find an option that fits.
Why CIS contractors choose Heron Financial
Heron Financial is a B Corp certified, whole of market mortgage and protection broker. We arrange mortgages for CIS contractors regularly, working with the specific way CIS income is structured, from the flat 20% deduction to the payslip vs tax return question, and matching each application to the lender whose criteria fits best. We work with plumbers, electricians, builders and the wider construction trades, whether you have been on CIS for six months or six years. It is all fee-free.
FAQs
Can I get a mortgage as a CIS contractor?
Yes. CIS contractors get mortgages routinely. The key factors are how long you have been on CIS, the consistency of your earnings, your credit profile and which lender we approach, because not every lender treats CIS income the same way.
How many CIS payslips do I need for a mortgage?
It depends on the lender. Some will work from around three months of CIS payslips, others want six months, and some want a full 12 months. Having six to 12 months of slips on file gives you the widest range of options.
Do mortgage lenders use my gross or net CIS income?
Lenders generally work on gross income. For CIS contractors, that is helpful, because the net figure on your payslip reflects only the flat 20% deduction at source, not your actual final tax position, which depends on your year-end self-assessment.
Can I get a mortgage if I have just moved from PAYE to CIS?
Often, yes, particularly if you have stayed in the same line of work. As a standard, lenders want at least three months of CIS history before they will consider you, and at that early stage the options are more limited. The longer you have been on CIS, the more lenders will be available.
Are mortgage rates higher for CIS contractors?
The standard factors that affect mortgage rates, your loan to value, your credit profile, your deposit size and the lender's product range, apply to CIS contractors the same way they apply to anyone else. The right lender match is more important than the CIS label itself.
Can I get a CIS mortgage as a first-time buyer?
Yes. Many CIS contractors apply as first-time buyers, and there is no separate "first-time buyer CIS mortgage". It is a standard residential application where the income is assessed using your CIS payslips.
Should I keep my CIS payslips and bank statements?
Yes. These are the documents lenders will need. Save every payslip you receive, keep your bank statements showing the corresponding credits, and hold on to your annual SA302 tax calculations once you have filed your return. The more you have to hand, the smoother the application.