The Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) have finalized a revised framework that removes the lender-level cap limiting high loan-to-income (LTI) mortgages to 15% of new residential lending. Individual lenders may exceed 15% in line with their risk appetite and business model while aggregate market lending remains subject to the Financial Policy Committee’s 15% limit. The policy replaces interim measures introduced in July 2025 and applies across PRA-authorized mortgage lenders and FCA-authorized lenders outside PRA groups. High LTI lending covers mortgages at or above 4.5 times income. The regulators will monitor the aggregate flow using single-calendar-quarter data, but will calculate firms’ individual flows and any required reductions on a rolling four-quarter basis, a change from the consultation intended to avoid abrupt adjustments. If aggregate lending becomes inconsistent with the 15% limit, lenders above 15% may be expected to reduce their shares gradually under uniform adjustment expectations, supported by governance and risk management standards. Further advances and retirement interest-only mortgages are excluded, while the existing de minimis threshold remains unchanged. The PRA rules, supervisory statement and FCA guidance take effect on Oct. 28, 2026, when interim directions will automatically lapse. The PRA will publish quarterly aggregate high LTI lending data, together with the volume of completed mortgages within the policy’s scope and its relationship to total quarterly completions.

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