The cap that limited each UK mortgage lender to 15% of its new mortgages at 4.5 times income or more is removed on Wednesday 28 October 2026, under final rules from the Bank of England's Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA).

The change, set out in policy statement PS19/26 published on 14 October, removes the firm-specific 15% cap on high loan-to-income (LTI) lending. A market-wide limit remains: total high-LTI lending across lenders is still expected to stay consistent with the Financial Policy Committee's 15% recommendation. A high-LTI mortgage is one at 4.5 times the borrower's assessed income or more, counting joint income where there are two applicants; that definition has not changed.

What changes for borrowers

An individual lender may now write more than 15% of its new mortgages at high income multiples, if its risk appetite and controls allow it, provided the market total stays within bounds. The regulators expect greater competition and a broader range of business models, and say the change may increase homeownership, noting first-time buyers account for a growing share of high-LTI lending. Nothing in the rules gives any borrower an automatic right to a larger loan: each application still depends on that lender's affordability checks, product terms and eligibility criteria.

What happens if the market total rises

If aggregate high-LTI lending becomes inconsistent with the 15% limit, the regulators may expect lenders to reduce their shares gradually back towards 15%. The change implements a Financial Policy Committee recommendation from July 2025. The 4.5-times threshold itself was not raised to five times income, despite suggestions during consultation; that question was passed to the Financial Policy Committee for future consideration.

Sources: Bank of England (PS19/26) and Mortgage Introducer.