On Oct. 14, 2026, UK PRA and UK FCA issued policy statementHigh loan to income lending (PRA PS19/26, FCA PS26/20) following their joint Apr. 2026 consultation.
Sets out regulators' final policy considering responses to the joint consultation.
15 responses received, most welcomed proposals to remove firm-level 15% cap while retaining the aggregate market limit, but some asked for changes to some proposals.
The regulators' have therefore made the following amendments to policy: adopting a rolling 4-quarter measure as the basis for calculating firms' individual high LTI flows and the regulators' expectations of firms' adjustments.
Clarifying that regulators will publish additional data alongside the quarterly aggregate high LTI flow measure to provide lenders with more visibility of market trends.
Updating the stylized examples to reflect the changes and to illustrate how the adjustment expectations could work in practice.
Other minor changes to PRA supervisory statement (SS) and FCA general guidance.
Minor edits to description of the de minimis to clarify that the definition remains exactly the same as the previous rule.
The regulators' final policy is set out through: amendments to the Housing Part of the PRA RulebookPRA RB made by the PRA Rulebook: CRR Firms: Non-CRR Firms: Housing (Amendment) Instrument 2026 (PRA 2026/27).
New PRA SS 2/26High loan to income lending; and FCA's general guidance FG26/11.
The amended PRA rules and FCA general guidance take effect on Oct. 28, 2026.
PRA and FCA will calculate the aggregate flow of high LTI lending on a quarterly basis.
PRA will publish this figure on its website each quarter, with total volume of completed mortgages in scope of the policy, share of all completed mortgages they account for.
FCA will monitor the aggregate flow and individual firm high LTI flows, and this will form part of considerations for supervisory engagement.
FCA will monitor a firm's compliance with the expectations sets out in its guidance and any temporary supplemental LTI guidance.
On Apr. 1, UK PRA, UK FCA issued joint consultation on high LTI.
UK PRA and UK FCA issued joint consultation paper High loan to income lending.
Follows UK PRA Jul. 2025 announced review of LTI, interim modification, see #261955.
Also follows UK FCA Oct. 2025 issued webpage on mortgage rule review, see #271532.
Background
In Jul. 2025, UK FPC recommended PRA and FCA amend implementation of their loan to income (LTI) flow limit to allow individual lenders to increase their share of high LTI lending while aiming to ensure aggregate flow stays consistent with 15% limit.
Immediately following the recommendation, PRA made available a modification by consent (MbC) for PRA firms to disapply the 15% limit, and FCA told firms they could apply for individual guidance if they wanted to lend at high LTI ratios above 15%.
The regulators set out that these were interim measures while policy review ongoing.
Proposals
PRA proposals apply to all PRA-authorized mortgage lenders and their subsidiaries, FCA proposals cover FCA-authorized mortgage lenders not owned by PRA-authorized firms.
The joint consultation proposes to implement FPC's recommendation by making changes to PRA Rulebook, introducing a new PRA supervisory statement (SS).
New FCA general guidance, as well as setting out the conditions for future relevant publications by the regulators.
Proposals include removing current 15% high LTI flow limit for individual firms.
Regulators propose that, while the aggregate is consistent with FPC's 15% limit, lenders should have additional flexibility to determine their individual high LTI lending strategies, in line with their own risk appetite and business models.
To ensure aggregate flow remains consistent with 15% limit, may be instances where the regulators expect firms to gradually reduce their high LTI flows towards 15%.
To allow firms to plan for such adjustments, PRA would publish the aggregate high LTI flow on its website each quarter from date the new PRA rules come into force.
This webpage, and a page on FCA site, will also include communication from the regulators on the details of any such adjustments.
Regulators propose measuring high LTI flow using fixed quarters, not rolling average.
Think their proposals could lead to increased lending, providing greater access to otherwise creditworthy households to borrow at higher LTIs.
Effectiveness
The closing date for the submission of responses to the proposals is Jul. 1, 2026.
Proposed implementation date for changes will be the date the new PRA rules, SS, and FCA guidance come into force, currently expected to be in the second half of 2026.
The PRA modification by consent of LTI flow limit is being extended to Dec. 31, 2026 while the consultation on the changes is ongoing; and the FCA will continue to expect firms to apply for individual guidance if want to lend at high LTI ratios above 15%.
On Oct. 14, 2026, UK PRA and UK FCA issued policy statementHigh loan to income lending (PRA PS19/26, FCA PS26/20) following their joint Apr. 2026 consultation.
Sets out regulators' final policy considering responses to the joint consultation.
15 responses received, most welcomed proposals to remove firm-level 15% cap while retaining the aggregate market limit, but some asked for changes to some proposals.
The regulators' have therefore made the following amendments to policy: adopting a rolling 4-quarter measure as the basis for calculating firms' individual high LTI flows and the regulators' expectations of firms' adjustments.
Clarifying that regulators will publish additional data alongside the quarterly aggregate high LTI flow measure to provide lenders with more visibility of market trends.
Updating the stylized examples to reflect the changes and to illustrate how the adjustment expectations could work in practice.
Other minor changes to PRA supervisory statement (SS) and FCA general guidance.
Minor edits to description of the de minimis to clarify that the definition remains exactly the same as the previous rule.
The regulators' final policy is set out through: amendments to the Housing Part of the PRA RulebookPRA RB made by the PRA Rulebook: CRR Firms: Non-CRR Firms: Housing (Amendment) Instrument 2026 (PRA 2026/27).
New PRA SS 2/26High loan to income lending; and FCA's general guidance FG26/11.
The amended PRA rules and FCA general guidance take effect on Oct. 28, 2026.
PRA and FCA will calculate the aggregate flow of high LTI lending on a quarterly basis.
PRA will publish this figure on its website each quarter, with total volume of completed mortgages in scope of the policy, share of all completed mortgages they account for.
