Consultation opens
03/04/2025
Consultation closed
08/05/2025
Finalised Guidance published
08/07/2025
08/07/2025
Amendments to the Prudential Regulation Authority's (PRA) Rulebook and the FCA’s general guidance on the Financial Policy Committee's (FPC) recommendation on loan to income (LTI) ratios in mortgage lending.
In light of the FPC’s new Recommendation[1] on 9 July 2025 regarding the LTI flow limit, any firm looking to increase their high-LTI lending beyond the current threshold can engage with their regulator.
PRA-authorised firms will have the option of applying to the PRA for a modification-by-consent, while FCA-authorised mortgage lenders can contact the FCA to discuss the possibility of individual Guidance in respect of the LTI flow limit, where appropriate.
These measures will be in place until the PRA and FCA update their rules and Guidance respectively following a public consultation, or further notice.
Feedback summary and the PRA’s Policy Statement (PDF)[3]
The FPC recommended increasing the volume of mortgages a lender needs to make the LTI flow limit apply from £100m per four rolling quarters, to £150m per four rolling quarters. The Prudential Regulation Authority (PRA)[4] give this effect through their Rulebook, and we give this effect through guidance, revised in February 2017 (FG17/2).
The FCA and the PRA (collectively ‘the regulators’) proposed these amendments following the FPC’s recommendation. The regulators consulted on the proposed amendments in April 2025 (CP25/6[5]) and the consultation period closed on 8 May 2025. The regulators have published feedback on responses received, as well as the PRA’s Policy Statement and the FCA’s Finalised Guidance.
The FCA’s finalised guidance is relevant to FCA-authorised mortgage lenders that are not a subsidiary of PRA-authorised firms. The PRA’s amendments to their Rulebook are relevant to mortgage lenders subject to the PRA’s rules, described in paragraph 2.7 of the consultation paper CP25/6[5].
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