The Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) have published final amendments to the PRA Rulebook and FCA guidance that increase the de minimis threshold for the mortgage Loan to Income (LTI) flow limit, meaning the limit will only apply to lenders that extend residential mortgages with a total value above GBP 150 million a year rather than GBP 100 million. The PRA rule change applies to banks, building societies, friendly societies, industrial and provident societies, credit unions, PRA designated investment firms and overseas banks (for UK branch activities), and requires those firms to apply the rules at UK subsidiary level for firms not already in scope. FCA finalised guidance sets expectations for FCA-authorised mortgage lenders not caught by the PRA rule, including lenders that are not subsidiaries of PRA-authorised firms. Feedback to the consultation included suggestions to set a higher threshold (including proposals of GBP 200 million and GBP 250 million) or remove the threshold entirely, but the regulators made no changes to the proposal; they estimate the number of lenders exempt from the LTI flow limit will rise from around 70 to around 80. The amended PRA rules and FCA guidance take effect on 11 July 2025.
Prudential Regulation Authority 2025-04-03
Prudential Regulation Authority and Financial Conduct Authority raise mortgage loan to income flow limit de minimis threshold to GBP 150 million
The Prudential Regulation Authority and the Financial Conduct Authority have finalized amendments to increase the de minimis threshold for the mortgage Loan to Income flow limit from GBP 100 million to GBP 150 million annually. This change affects lenders extending residential mortgages above this value, with the number of exempt lenders expected to rise from 70 to 80. The amendments will be effective from 11 July 2025.