A strong CIS income should not mean settling for a smaller mortgage or being treated as an affordability risk. Yet that is exactly what can happen when a lender applies standard self-employed rules to a subcontractor who is paid under the Construction Industry Scheme. So, what are CIS mortgage criteria? They are the checks a lender uses to decide whether your CIS earnings are reliable enough to support the mortgage you need – and the right lender may assess those earnings very differently.
For many CIS workers, the key is finding a lender prepared to use gross income shown on CIS payslips or remittance statements, rather than relying only on net profit after expenses. That can make a material difference to the amount you can borrow.
What are CIS mortgage criteria?
CIS mortgage criteria are the rules lenders use when assessing mortgage applications from construction subcontractors paid through the Construction Industry Scheme. They cover your income evidence, work history, deposit, credit profile, outgoings and the property you want to buy.
The headline issue is how a lender treats your income. Under CIS, contractors often have 20% tax deducted at source by the contractor paying them, or 30% where they are not registered. You may also claim legitimate business expenses through self-assessment, reducing the taxable profit shown on your tax return.
A mainstream lender may focus on that lower taxable profit and offer less than your day-to-day earnings suggest. A specialist lender may instead assess a percentage of your gross CIS income, subject to its policy and the evidence available. Neither approach is automatically right or wrong, but they can produce very different borrowing figures.
How lenders assess CIS income
Every lender has its own underwriting policy. Some will treat you as self-employed and ask for two or three years of accounts or SA302 tax calculations. Others have dedicated CIS criteria and can consider gross income from your payslips, CIS vouchers or remittance statements.
Where gross income is accepted, lenders commonly want to see a consistent pattern of earnings. They may use an average over the most recent three, six or 12 months, depending on their policy and how long you have been working under CIS. If income has risen recently, the underwriter will want a clear reason why the higher level is sustainable.
This is where a well-packaged application matters. A short break between sites is normal in construction and does not necessarily make you unsuitable for a mortgage. But unexplained gaps, inconsistent payment records or a sudden increase in income can prompt more questions. Providing the context upfront helps the lender see the reality behind the figures.
Gross income versus net profit
This distinction is often the deciding factor. A contractor earning £1,200 a week gross may have a lower taxable profit after allowable expenses. If a lender bases affordability solely on net profit, its calculation may not reflect the income you actually receive and use to meet your commitments.
Lenders that accept CIS income may use gross figures before tax, but usually after deducting any materials element. They will also consider whether your income is regular, whether deductions are consistent and whether your declared expenses appear reasonable. Gross income treatment is not guaranteed, but it is a route worth exploring before accepting a lower offer based on accounts alone.
The evidence you are likely to need
Your paperwork should make it easy for an underwriter to verify who pays you, how frequently you are paid and whether your income is stable. CIS payslips or remittance statements are central to this. Depending on the lender, you may need three months’ evidence, six months’ evidence, or a longer history.
You will normally also be asked for personal bank statements. These should show the CIS payments arriving and give a clear picture of your regular commitments. If you have transferred money between accounts, paid large one-off costs or received unusual credits, be ready to explain them clearly.
A lender may additionally request your latest SA302s and tax year overviews, especially if you have been self-employed for longer, your income varies significantly or the lender is using a more conventional assessment. Current contracts can also help, particularly where they show a defined day rate, an ongoing assignment or a renewal history with the same client or agency.
The exact documents depend on the lender. Submitting more paperwork than necessary does not automatically improve an application. Submitting the right documents, in the right order, does.
Work history, contracts and gaps between jobs
You do not always need years of CIS history to obtain a mortgage. Some lenders will consider applicants after a relatively short period in the scheme, particularly if they can show previous work in the same trade, a solid employment history or a signed upcoming contract.
However, newer CIS workers may face a narrower range of lenders, and the deposit required could be higher. A longer, stable history generally gives you more options.
Short gaps between contracts are common and should be assessed in context. An underwriter may be comfortable with them if you have a record of continuous work, strong demand for your trade and a current contract. Longer unexplained gaps, repeated periods without income or a recent move into a completely new sector may require a more cautious approach.
Do not assume a contract must have many months left to run. Some specialist lenders understand rolling contracts and project-based work. What they want to establish is whether you have a credible track record of securing future work.
Deposit, credit and affordability still matter
CIS status does not override the core mortgage checks. Your deposit affects the loan-to-value ratio and the range of products available. A larger deposit can improve pricing and give the lender more comfort, but CIS mortgages are available at a range of deposit levels where the wider application is strong.
Your credit file matters too. Missed payments, defaults, county court judgments and payday borrowing do not always mean an automatic no, but they can limit lender choice. The age, severity and explanation of any issue are all relevant. Applying to a lender that does not accept your credit profile can leave an unnecessary footprint without moving you closer to approval.
Affordability is broader than income. Lenders consider credit commitments, dependants, childcare, student loans and regular spending, then test whether you could still afford payments if interest rates rose. If you are purchasing with a partner, their income and commitments will be assessed too. A high CIS day rate is helpful, but it is only one part of the calculation.
Common reasons CIS applications run into trouble
The most avoidable issue is approaching a lender that assesses only taxable profit when gross CIS income is needed to reach the required borrowing. That can lead to a disappointing maximum loan figure or a decline that could have been avoided with better lender selection.
Poorly presented evidence is another frequent problem. Missing payslips, bank statements that do not match submitted income, or material deductions that have not been explained can slow the case down. So can an application that overlooks a recent credit issue or a large commitment such as car finance.
There is also a trade-off between speed and choice. A lender with simple CIS criteria may issue a quick decision in principle, while another may offer a better rate but require more detailed income verification. The right option depends on your timescale, deposit, credit profile and how much you need to borrow.
How to put yourself in the strongest position
Before applying, keep your CIS payslips, remittance statements and bank statements organised. Make sure your address history is accurate on your credit file, avoid taking out new credit unnecessarily and keep your deposit trail clear. If gifted funds are involved, the lender will need to understand where they came from.
It also helps to know your real target borrowing figure before viewing properties seriously. That means using the income method a suitable lender is likely to accept, rather than relying on a generic online calculator built for permanent salaried employees.
The Residential Mortgage Hub works with contractor-focused lenders that understand CIS income, fixed-term contracts and non-standard earnings. The aim is not simply to find a mortgage, but to place your case with an underwriter who can assess it properly from the outset.
Your income does not need to fit an outdated salaried template to support the home you want. With clean evidence, a realistic affordability position and the right lender criteria, CIS work can be presented as the consistent, valuable income it is.
