Why Gaps Matter to Lenders
As a contractor, gaps between contracts are a normal part of your working life. However, lenders view gaps as a potential risk indicator because they raise questions about income stability and sustainability.
What Lenders Worry About
- 1.Income continuity — Frequent or long gaps suggest unreliable income streams.
- 2.Employability — Extended gaps might indicate difficulty finding work in your field.
- 3.Financial management — How do you manage mortgage payments during bench time?
Context matters
What's an Acceptable Gap?
weeks
Generally Fine
Most lenders accept gaps up to 6 weeks without issue.
weeks
Potentially OK
May need explanation. Specialist lenders more flexible.
weeks
Problematic
Very limited options until new contract secured.
Gap Patterns That Concern Lenders
- Multiple gaps in the past 12-24 months
- Gaps getting longer over time
- Current gap exceeding 8 weeks with no contract in sight
- Short contracts (under 3 months) with gaps between each
Gap Patterns Lenders Accept
- Single short gap (4-6 weeks) in past 2 years
- Planned holiday/sabbatical with documentation
- Currently on contract after recent gap
- Gap between contracts at different companies (transition)
Lender Requirements
Contractor Specialists
Current status:
Must be on contract or within 6-8 weeks of last contract ending
Historical gaps:
Generally flexible if overall pattern is strong
Examples: CMME, CLS Money, Kensington
High Street Banks
Current status:
May prefer current contract, but can use accounts
Historical gaps:
Less scrutiny if using company accounts method
Examples: Halifax, Nationwide (using accounts approach)
Building Societies
Current status:
Often most flexible — focus on overall trading history
Historical gaps:
May manually underwrite considering full picture
Examples: Yorkshire BS, Skipton
Managing Gaps Strategically
Before You Apply
1. Time Your Application
If possible, apply while on contract with several months remaining. Mid-contract is ideal — you have both history and runway ahead.
2. Secure Next Contract First
If your current contract is ending, try to line up your next contract before starting the mortgage application. Even an offer letter helps.
3. Document Your History Clearly
Prepare a CV-style document showing your contract history with clear dates, rates, and any gaps explained (e.g., "4-week planned break").
4. Show Financial Reserves
Evidence that you can weather gaps (savings, retained profits in company) reassures lenders about your ability to manage bench time.
Explaining Gaps
If underwriters ask about gaps, be prepared with clear explanations:
- • "Contract ended, secured new role within 4 weeks" — Standard transition
- • "Planned 6-week break between major projects" — Deliberate bench time
- • "Waited for right opportunity rather than taking short contract" — Quality over quantity
- • "Relocated to new city, established new client network" — Circumstantial gap
Pro tip
Applying Between Contracts
It's not ideal, but sometimes you need to apply for a mortgage while between contracts. Here's how to improve your chances:
Option 1: Wait for New Contract
The safest approach. Most lenders will accept an application once you have a new contract signed, even if it hasn't started yet.
Best for: Standard purchases with flexible timelines
Option 2: Use Company Accounts
If you trade through a Ltd company, some lenders will assess you on historical company accounts rather than current contract status.
Best for: Directors with 2-3 years strong accounts
Option 3: Specialist Lenders
Some specialist lenders are more flexible about current gaps if your historical contracting record is strong (12-24 months continuous prior).
Best for: Experienced contractors with brief gaps
Option 4: Remortgage Later
If you're purchasing, consider a higher LTV mortgage now (accepting a higher rate) and remortgaging once you're back on contract.
Best for: Time-sensitive purchases
Be honest
Find contractors-friendly lenders
Get matched with lenders who understand contractor income patterns and gaps.
Get matched