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BoE Eyes Easier Mortgage Rules
1 Nov
Summary
- Bank of England may raise mortgage limit to five times income.
- This could boost lending capacity by 7% of annual new mortgages.
- UK housing market shows signs of losing momentum recently.
The Bank of England's Financial Policy Committee is evaluating a potential increase to the threshold for high loan-to-income (LTI) mortgages. Currently capped at 4.5 times household income, this limit might be raised to five times income, offering borrowers access to larger loans.
This adjustment is expected to free up substantial lending capacity, estimated by UK Finance to be equivalent to 7% of annual new residential mortgage lending. In 2025, high-LTI mortgages for first-time buyers saw a significant 66% increase.
The review coincides with a noticeable loss of momentum in the UK housing market. Data from October 2026 indicated a slowdown in annual house price growth to 0.5%, with month-on-month prices remaining static. Factors such as rising mortgage costs and anticipated interest rate hikes are dampening buyer demand.
