PRA and FCA drop the firm-level 15% cap on high loan-to-income mortgages, keep the market limit
Serguey Asael Shinder1 min readThe Bank of England's Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) published joint policy statement PS19/26 on high loan-to-income (LTI) lending on 14 October 2026, finalising consultation paper CP6/26.
What changes. The firm-specific 15% cap on the share of new residential mortgages a lender may write at high LTI is removed. Individual lenders may now go above 15%, provided the aggregate high-LTI flow across the market stays consistent with the Financial Policy Committee's 15% limit. The change implements an FPC recommendation from July 2025. The FPC's definition of high LTI — 4.5 times income — is unchanged.
If the market overshoots. Should the aggregate become inconsistent with the FPC limit, the regulators may expect firms to reduce their high-LTI share gradually back towards 15% in a smooth and predictable way. Responding to industry concerns, the final policy measures each firm's flow, and any expected adjustment, on a rolling four-quarter basis, while the regulators will keep monitoring the aggregate on a single-quarter measure.
Transparency. The PRA will publish the aggregate single-quarter high-LTI flow on its website every quarter, with additional data on mortgage completions alongside it; the FCA will publish information when adjustments are expected. Governance and risk-management expectations sit in a new PRA supervisory statement (SS2/26) and replacement FCA guidance.
The regulators' expectations. They anticipate greater use of the aggregate limit and more competition between business models, and say the change may raise homeownership, since first-time buyers account for a growing share of high-LTI lending. They received 15 responses; comments on the 4.5x definition and the 15% limit itself were passed to the FPC for its next review of housing policy.
Source: Bank of England / PRA, "PS19/26 – High loan to income lending" — https://www.bankofengland.co.uk/prudential-regulation/publication/2026/october/high-loan-to-income-lending-policy-statement