Mortgages
The question
To ask the Chancellor of the Exchequer, what assessment her Department has made of the potential impact of allowing lenders to offer mortgages of over 4.5 times buyers’ income on the financial stability of mortgage lenders.
Answered by Lucy Rigby
The loan-to-income (LTI) flow limit restricts the share of new mortgages that lenders can issue at or above 4.5 times a borrower’s income. It is set by the Bank of England’s Financial Policy Committee (FPC), which is responsible for identifying and addressing systemic risks to UK financial stability.
In July 2025, the FPC judged that the system-wide cap—limiting high-LTI mortgages to no more than 15 per cent of all new owner-occupier lending—continues to provide appropriate protection against the build up of unsustainable household debt which could pose risks to financial stability in an economic downturn.
However, to ensure the LTI flow limit is implemented proportionately and efficiently, the Committee recommended that the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) amend implementation of the flow limit to allow individual lenders to increase their share of high-LTI lending, provided the aggregate flow remains consistent with the 15 per cent limit. Details on this recommendation can be found in the FPC’s July Financial Stability Report.
The government supports the FPC’s changes, maintaining resilience of the financial system while supporting responsible access to home ownership.
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