CIS Mortgage Calculator
Using a CIS mortgage calculator can let you know your borrowing power as a CIS worker. Ours is quick and easy to use, find out your maximum loan in minutes.
Understanding the CIS Mortgage Calculator
If you work in the construction industry and are paid under the Construction Industry Scheme (CIS), securing a mortgage can present unique challenges. This is where a CIS mortgage calculator comes in handy. It’s a digital tool designed to estimate how much you can borrow for a mortgage based on your CIS income.
What is a CIS mortgage calculator?
A CIS mortgage calculator is a financial tool that helps CIS workers determine their potential mortgage borrowing power.
Unlike traditional mortgage calculators that rely on net income, a CIS mortgage calculator focuses on gross income and day rate. This is because lenders often assess CIS workers’ affordability based on their gross earnings rather than their net income after tax deductions.
Why is a CIS Mortgage Calculator different?
A standard mortgage calculator will often go off your annual salary, however with a CIS Mortgage this is not how they are calculated. A CIS Mortgage calculator uses your day rate to calculate how much you may be able to borrow. This can be dramatically different to how a normal calculator would work it out. This is because a standard calculator would go from an average on your last 2 years self employed tax returns. As we know, many people applying for a CIS mortgage will not have this.
How does a CIS mortgage calculator work?
To use a CIS mortgage calculator, you typically need to provide the following information:
- Gross annual income: This is the total amount you earned before tax deductions.
- Other income: Any additional income sources, such as rental income or benefits.
- Deposit: The amount of money you have saved for a deposit.
The calculator will then estimate your potential mortgage borrowing amount based on lender criteria and affordability assessments.
The Importance of Using a CIS Mortgage Calculator
Using a CIS mortgage calculator offers several benefits:
- Accurate estimate: It provides a realistic estimate of your borrowing capacity, helping you set realistic expectations.
- Time-saving: It saves you time by giving you a quick overview of your mortgage options without the need for multiple lender applications.
- Informed decisions: Armed with this information, you can make informed decisions about property prices and mortgage terms.
Factors Affecting CIS Mortgage Calculations
Several factors influence the outcome of a CIS mortgage calculator:
- Lender policies: Different lenders have varying criteria for assessing CIS workers, so the calculator’s results might differ depending on the lender selected.
- Income stability: A consistent income history is generally preferred by lenders, so your employment length and income stability can impact the calculator’s outcome.
- Credit score: A good credit score increases your chances of securing a better mortgage deal.
- Deposit size: A larger deposit often improves your borrowing capacity.
Tips for Maximizing Your CIS Mortgage
- Improve your credit score: Pay bills on time, reduce debt, and register on the electoral roll to enhance your creditworthiness.
- Save for a larger deposit: A substantial deposit can improve your mortgage options and interest rates.
- Consider a mortgage broker: A broker can access a wider range of lenders and provide expert advice.
- Shop around: Compare mortgage deals from different lenders to find the best rates and terms.
Disclaimer: While a CIS mortgage calculator is a useful tool, it provides an estimate only. The final mortgage offer depends on individual circumstances and lender assessments. It’s essential to consult with a mortgage advisor for personalized guidance.
What is the difference between a day rate calculation and a normal one?
A normal calculation will require 2 years SA302 or tax calculations and will take an average of the 2. This may not be representative of what a CIS worker gets at the time of application, or what they may be able to borrow on a mortgage.
This is where the CIS mortgage calculator comes in. It offers you a much more accurate prediction of how much you may be able to borrow on a CIS mortgage. It does this by asking for your day rate rather than your annual income.
When I use a CIS mortgage calculator, which lenders will accept it?
There are many lenders that offer a CIS mortgage, however they all have different calculations and ways of working out how much you can borrow. Our CIS mortgage calculator therefore gives you an average which you may be able to get.
However, if you would like a more accurate figure we recommend you get in touch with one of our expert CIS mortgage specialists that can tell you which lender is best for you and how much they will lend you.
A mortgage article by Mark Robinson – Mortgage & Equity Release Broker
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