FG26/11: The Financial Policy Committee's recommendation on loan to income ratios in mortgage lending: general guidance

Read FG26/11 (PDF)

• Read the joint policy statement FCA PS26/20 (PRA PS19/26)
• Read the PRA's supervisory statement (SS)
• See the latest quarterly publication on the PRA’s website. 

Why we've made these changes 

Following a recommendation from the FPC, we and the PRA consulted on:

• Replacement of our general guidance, initially issued in October 2014 (FG14/8) and revised in February 2017 (FG17/2) and July 2025 (FG25/4);
• Changes to the PRA's Rulebook; and  
• A new PRA supervisory statement (SS) on high loan to income lending.

The FPC recommended that the PRA and FCA amend implementation of its LTI flow limit to allow individual lenders to increase their share of high LTI lending above 15%, while aiming to make sure the aggregate flow remains consistent with the 15% limit.

FCA PS26/20 (PRA PS19/26) sets out our final policy, considering responses to our joint consultation.

Who this is relevant to

Our finalised guidance is relevant to FCA-authorised mortgage lenders that are not also PRA authorised or a subsidiary of PRA-authorised firms.  

The PRA’s amendments to its Rulebook and new SS are relevant to all firms in scope of the Housing Part of the PRA’s Rulebook. The PRA's SS notes that PRA rules also require the relevant firms to apply the rules at UK subsidiary level in relation to firms not already within the rules' scope.

Next steps

• The PRA and FCA will calculate the aggregate flow of high LTI lending on a quarterly basis.
• The PRA will publish this figure on its website each quarter, along with the total volume of completed mortgages in scope of the policy and what share of all completed mortgages they account for.
• The FCA will monitor the aggregate flow and individual firm high LTI flows, and this will form part of considerations for supervisory engagement.
• The FCA will monitor a firm’s compliance with the expectations set out in its guidance and any temporary supplemental LTI guidance.

Background

This work is part of our wider review of mortgage rules.

The LTI flow limit plays an important role in protecting borrowers and financial stability, while still allowing creditworthy households to access home ownership.

In July 2025, the FPC recommended the PRA and FCA amend how we implement its loan-to-income (LTI) flow limit.

We and the PRA jointly consulted on amendments to the PRA's Rulebook, a new PRA SS, and replacement FCA general guidance in CP26/12 and PRA CP6/26.