Not to be confused with the long running American TV show, CSI, CIS mortgages – or Construction Industry Scheme mortgages, to give them their full title – aren’t actually real mortgage products, but the way in which lenders treat a mortgage when an applicant has applied via the Construction Industry Scheme (CIS).

So, let’s start with that. 

What is the Construction Industry Scheme?

Remember when it was on subcontractors (or ‘subbies’) to pay their own tax? Well, via the CIS, the contractor now deducts it at source and at a rate that’s more preferential for the subcontractor than if they were handling it themselves.

From our perspective, it’s probably a way in which HMRC can more effectively monitor the tax of subcontractors. However, on the upside, subcontractors that are part of the scheme can now gain access to higher value mortgages.

But why?

CIS mortgages explained

As a Guildford mortgage broker that’s become well-known for getting mortgages for self-employed people in Surrey, we’ll be honest in saying that self-employed mortgages are harder to secure than standard mortgages.

Whilst there are undoubtedly many upsides to being self-employed, the traditional PAYE slip seems to carry much more weight than evidence of dividend payments – in the eyes of the lender, at least. Lenders still seem to view self-employed people as a higher risk.

However, those applying for a CIS mortgage – or rather those applying for a mortgage via the CIS – are able to access a higher loan to value mortgage. This is because the scheme permits lenders to make a mortgage decision based on gross income (the amount before tax and national insurance payments) and not net income, which is usually the case with those applying for a self-employed mortgage.

Can I apply for a CIS mortgage?

If you work in the construction sector and can evidence the following three things, then yes: –

1.  3 to 6 months of CIS payslips

2.  3 to 6 months of bank statements

3.  Proof that tax has been deducted at 20%

Also, you don’t need to be involved in the heavy lifting aspect of construction. It covers all those who work in the construction industry on a self-employed basis.

Do I still need a deposit?

Alas, yes. But the good news is that you can put down as little as 5%. As mentioned above, one of the benefits of CIS mortgages is that applicants can generally access a higher mortgage amount then they would do if they applied for a general self-employed mortgage. However, typically speaking, the higher the amount you need to borrow, the higher the deposit needs to be, too.

Ready to apply for a CIS mortgage?

Contact our team of Guildford mortgage advisers who will be able to offer CIS mortgage advice and handle the mortgage application on your behalf. You can reach us on 01483 238280 or by e-mailing info@complete-mortgages.co.uk.