Mortgage lending at 4.5 times income: lenders gain flexibility from 28 October

On 14 October 2026, the Bank of England and FCA published final high loan-to-income (LTI) mortgage rules. They take effect across the UK on 28 October 2026. A high LTI mortgage is a new residential loan worth at least 4.5 times the borrower’s assessed annual income, or joint income for a joint application.

What changes for lenders

The previous framework limited each relevant lender’s high LTI mortgages to 15% of its new residential mortgage count. From 28 October, that firm-level 15% cap is removed. Individual lenders may choose a higher share if their risk appetite and controls allow. Regulators will still seek to keep the market-wide share consistent with 15%. They may ask lenders to reduce high LTI lending gradually if the aggregate becomes inconsistent with that level.

This is a rule about lenders’ portfolios, not a promise that any applicant can borrow 4.5 or five times income. The 4.5 threshold defines a category for regulatory monitoring. It is not a universal maximum loan multiple, and lenders retain their own criteria.

An example

With verified joint annual income of £60,000, a £270,000 loan is 4.5 times income and falls into the high LTI category; £300,000 is five times income. Some lenders may have more room to consider such applications after 28 October. That does not mean a household earning £60,000 will be offered £300,000. The lender still assesses spending, other debts, deposit, credit record, income reliability and its lending policy.

Practical steps for applicants

1. Divide the loan you want by your verified annual income; use joint income for a joint application. If the result approaches or exceeds 4.5, ask several lenders or an authorised mortgage broker what their criteria are after 28 October.
2. Compare repayments, interest rate, term, fees and what happens if rates rise, not just the maximum amount. A larger loan brings greater household risk.
3. Gather evidence of income and spending. Employees may need payslips and statements; self-employed applicants may be asked for SA302 tax calculations, bank statements and two to three years of accounts. Exact requirements vary by lender.
4. Before offering on a home, check what a lender or broker is prepared to consider for your circumstances. A final offer follows full underwriting.

The Bank of England will publish the aggregate high LTI share quarterly. The change does not automatically alter an existing mortgage agreement. Sources: the joint Bank of England/FCA policy statement, FCA guidance and MoneyHelper’s mortgage application guide. Checked 14 October 2026.