High Loan-to-Income Mortgages From 28 October 2026: The End of the Lender-Level 15% Cap

From 28 October 2026, a UK mortgage lender no longer has to keep its own high loan-to-income lending, meaning mortgages at or above 4.5 times income, to 15% of its new mortgages. The 15% limit stays for the market as a whole, and if the market total becomes inconsistent with it the regulators can ask lenders above 15% to reduce gradually. The change is set out in PRA PS19/26 and FCA PS26/20, published on 14 October 2026, with a new PRA supervisory statement, SS2/26, and new FCA guidance, FG26/11, which replaces FG14/8, FG17/2 and FG25/4. The PRA now publishes the market-wide figure each quarter. It was 14.1% in 2026 Q2.

What changed on 28 October 2026

The Financial Policy Committee (FPC), the Bank of England committee responsible for financial stability, recommended the change in July 2025. Its aim was to let individual lenders take a larger share of high LTI lending while the market total stays consistent with 15%. The regulators consulted in PRA CP6/26 and FCA CP26/12 and received 15 responses.

Since July 2025, lenders wanting to go above 15% could use interim measures: the PRA's modification by consent or individual guidance from the FCA. Those directions fell away automatically on 28 October 2026, and firms using them need to take no action.

Before and after

Who is in scope

The PRA rules apply to PRA-authorised mortgage lenders, such as banks and building societies, and to their mortgage-lending subsidiaries. FG26/11 applies to FCA-authorised lenders that are not PRA firms or their subsidiaries, and covers an overseas firm only for activity from a UK establishment.

A high LTI mortgage is one where the credit is at or above 4.5 times the borrower's income, or joint income, at the time the lender assesses it. The policy counts first-charge regulated mortgages and excludes buy-to-let, second charge mortgages, further advances, lifetime mortgages, retirement interest-only mortgages and remortgages with no change to the principal outstanding.

Smaller lenders are outside the limit. A lender is below the de minimis threshold if, in both of two consecutive sets of four quarters, it lent less than £150 million in regulated mortgages or entered into fewer than 300 regulated mortgage contracts. A lender that crosses the threshold becomes subject to the limit from the start of the second quarter after the qualifying period.

How the market-wide limit works

The regulators monitor the market each single quarter. If they judge the aggregate inconsistent with 15%, they may expect every lender above 15%, measured over four rolling quarters, to cut its future flow. The expected cut is a fraction of the amount by which the lender exceeds 15%, applied again each quarter until the lender is at or below 15% or the expectation is withdrawn. Lenders at or below 15% are expected to stay there while an adjustment is in force.

SS2/26 gives a worked example. A lender at 17.5% is 2.5 percentage points above 15%. With a one-sixth reduction, it should take steps to bring its flow to no more than 17.1% in the first measured quarter, then 16.7%, then 16.4%, and so on. The PRA does not expect reductions to be accurately reflected in the data until six quarters after an announcement.

Adjustments apply only to future lending decisions. Lenders are not expected to withdraw mortgage offers already approved. For FCA lenders, an adjustment is set out in temporary supplemental LTI guidance. FG26/11 notes the FCA could use its power under section 55L of FSMA to require a lender that does not follow the guidance to stop entering into high LTI mortgages.

The first published figures

The PRA published its first figures on 14 October 2026. They cover only lenders above the de minimis threshold.

In-scope mortgages made up 28% to 31% of all regulated mortgage sales in those quarters. The regulators have not set any expectation for lenders to reduce. The PRA will publish 2026 Q3 figures in 2026 Q4.

The trend matters for planning. On a single-quarter basis the aggregate rose in each quarter published, from 9.7% in 2025 Q3 to 14.1% in 2026 Q2, which is 0.9 percentage points below 15%. First-time buyers have averaged 44% of mortgage volume since 2014, but made up 54% of high LTI lending in 2025 Q2.

What lenders must do

The regulators expect lenders already doing high LTI lending to have controls in place. Lenders planning to go above 15% may need to strengthen them. For PRA firms, SS2/26 expects:

• Risk appetite limits on high LTI lending
• Monitoring of the current flow, the expected future flow, related credit concentrations and high-risk segments, and the performance of these mortgages
• Management information that informs board discussion
• For firms above de minimis, monitoring of the PRA's published aggregate
• Assurance that the firm can reduce its future high LTI flow if asked
• A discussion with supervisors, as part of regular engagement, of risk management changes made to go above 15%

For FCA lenders, FG26/11 says a firm should not operate on the basis that it can permanently keep a high LTI flow above 15%. It should notify the FCA if it intends to change its lending strategy to go above 15%, monitor its own flow and the aggregate, watch for temporary supplemental guidance, and make sure its governing body approves and oversees its plan for reducing the flow if required.

Before increasing high LTI volumes, a lender should model a reduction scenario and confirm how fast credit criteria, broker distribution and product limits can change. Respondents to the consultation pointed to the gap between mortgage approval and completion as the main difficulty in managing flow precisely.

Affordability rules still apply

The LTI limit is a financial stability tool. It sits on top of the conduct rules, not in place of them. Under MCOB 11.6.2R a lender must assess whether the customer can afford the mortgage, using sufficient, verified and appropriate information. Under MCOB 11.6.18R it must take account of likely future interest rate increases for at least five years, unless the rate is fixed for five years or more. The FCA's interest rate stress test page explains the flexibility in that rule. The FPC's former affordability test recommendation was withdrawn in August 2022.

The FCA consulted in CP26/18, published on 9 June 2026, on targeted changes to responsible lending rules for interest-only and part-and-part, retirement interest-only, variable income, foreign currency, credit impaired and bridging loans. The consultation has closed and a policy statement will follow. It says its proposals keep the duty to check affordability. Our guide to MCOB 11.6 affordability controls covers the assessment in detail.

What brokers should do

The limit and the new guidance apply to lenders, not to mortgage intermediaries. Brokers will still feel the effects:

• The regulators expect lenders to use more of the 15% allowance and to adopt a wider range of business models, so criteria at or above 4.5 times income may differ more between lenders
• If the regulators announce an adjustment, lenders above 15% will tighten criteria for new applications, while offers already approved stand
• A higher income multiple does not change the suitability test. A recommendation still needs to fit the customer's needs and circumstances, as our guide to mortgage advice suitability explains
• The Consumer Duty applies to the outcomes customers get from larger loans, as covered in our guide to Consumer Duty for mortgage brokers

Checklist for lenders and brokers

For firms applying for or varying FCA mortgage authorisation, the risk management framework above is part of what the regulators will expect to see. Our mortgages and home finance page covers the wider rules.