What Changes When the High-LTI Mortgage Cap Goes Market-Wide?

From 28 October 2026, the high loan-to-income (LTI) cap stops applying lender by lender. Larger lenders can put more than 15% of their new mortgages at 4.5 times income or above, as long as the market as a whole stays consistent with 15%. If it doesn’t, regulators may expect lenders above 15% to cut back gradually.

Think of it like a family phone contract.

Under the old deal, everyone had their own allowance. Use your share and you were done for the month, however little the rest of the house had used.

The new deal is a shared plan. One allowance for the whole house. You can go past your old share, as long as the house doesn’t.

Every house has a heavy user. The one signed up to every football update going.

(I’m not naming names.. But I will say that it was 2006)

And if the house goes over?

The heavy users get slowed down. Gradually.

What was the high-LTI cap?

A high-LTI mortgage is one where the loan is 4.5 times your income or more.

(Or joint income, if there are two of you)

The FCA first issued guidance on the limit in 2014. Lenders above a minimum size have been limited to 15% of their new mortgages at that level.

This is per lender and measured over a rolling year.

Not everything is covered, however.

Under the new rules, buy-to-let, second charge mortgages, further advances, lifetime mortgages, retirement interest-only mortgages, and remortgages with no change to the amount borrowed all sit outside it.

What changes on 28 October?

The 15% cap stops applying to each lender and applies to the market as a whole. So “cap removed” is only half right.

More like a single consolidated net, rather than multiple per-lender ones.

From 28 October, a lender can go above 15%, as long as high-LTI lending across the market stays consistent with the 15% limit.

The old cap comes out of the PRA’s rulebook. In its place: a firm “must conduct its business of entering into high LTI mortgage contracts in a prudent manner.”

One sentence. That’s the rule.

(There’s more around it. PRA-regulated lenders, such as banks and building societies, that plan to go above 15% are expected to discuss it with the PRA. Most other lenders should notify the FCA.)

Has the cap gone for good?

Not entirely. The per-lender cap has gone. The market-wide limit hasn’t, and the FCA says lenders shouldn’t assume they can stay above 15% for good.

Straight from the horse’s mouth (if horses spoke fliuent Regulator-ese):

“Firms should not operate on the basis that they can permanently maintain a high LTI flow of more than 15%.”

If high-LTI lending across the market stops being consistent with 15%, the regulators may expect lenders above 15% to bring theirs down. Gradually, by a set fraction of how far over they are, quarter after quarter. It applies to new lending only. Lenders aren’t expected to withdraw mortgage offers they’ve already approved.

As of 14 October, nobody’s been asked. In the Bank of England’s words: “The regulators have not set any current expectations on firms to reduce their high LTI flow.”

How much lending is already at 4.5 times income or more?

14.1% of the mortgages the rule covers, in April to June 2026. Against a limit of 15%.

It’s gone up each quarter since July–September 2025.

14.1% of what, though?

(Every maths teacher’s favourite question every time you left the units off an answer)

Of mortgages in scope of the rule, from lenders above the minimum size.

In-scope mortgages were 208,090 of the 746,200 regulated mortgages in that quarter. About 28%. So it’s not 14.1% of ALL mortgages.

Will the market go over 15%?

Dunno, mate; the data stops in June, but the next figure, for July to September, is due before the end of the year.

We’ll have to wait and see…

Why did the regulators do it?

In their words, they “anticipate” more use of the market-wide limit and “increased competition”. And they say the change “may increase homeownership rates, as first-time buyers have accounted for an increasing share of high LTI lending.”

Anticipate. May.

Those are the regulators’ own hedges.

Whether lenders actually use the extra room is up to lenders. It’s a rule about lenders’ books, not a decision about anyone’s application.

One plan for the whole house now.

Nobody’s been slowed down.

Buying soon and wondering whether any of this touches your plans? It’s worth 15 minutes on the phone.

🚫 Your home may be repossessed if you do not keep up repayments on your mortgage.

Sources: Bank of England / Prudential Regulation Authority, PS19/26 “High loan to income lending” (joint with FCA PS26/20, published 14 October 2026); PRA supervisory statement SS2/26 (published 14 October 2026, effective 28 October 2026); PRA “High loan to income (LTI) lending” web page (published 14 October 2026), Table 1: high-LTI share of in-scope mortgages, single-quarter basis, 2025 Q3 to 2026 Q2, firms above the de minimis threshold only (RegReportingDesk notes the volumes are rounded to the nearest 10 and subject to revision). Financial Conduct Authority, FG26/11 “The Financial Policy Committee’s recommendation on loan to income ratios in mortgage lending: general guidance” (14 October 2026), which replaces FCA guidance first issued as FG14/8 on 1 October 2014. Wording of the amended PRA rule as reported by RegReportingDesk, “PRA High LTI Lending: Firm-Level 15% Cap Ends 28 October” (15 October 2026).

Related reading: What Does the 2.5% Deposit “Your First Home” Scheme Actually Mean? | Three Hawks Circle: Bank of England Base rate held (again) at 3.75%. So did the split. What does that mean for my mortgage?