Occasional Paper No. 53: Changes in the mortgage market post 4.5 limit on loan to income ratios

Lenders have been encouraged to restrict the number of mortgages they issue with high LTI ratios following concerns over excessive and unsustainable borrowing for consumers. How has this affected allocation of mortgages and their prices?

Occasional Paper No.53 (PDF)


Recovery of the UK housing market has been linked to a rise in the share of mortgages extended at high loan to income (LTI) ratios. Leveraging household debt to unsustainable levels risks an increase in defaults on those loans and higher risk of economic instability. 

FPC recommendations that lenders do not overextend on their lending at high LTI ratios has seen a change in lending patterns in the market.

We look at the research identifying how the recommendation has effected allocation of high LTI mortgages across consumers and mortgage prices.


Adiya Belgibayeva.


Research notes contribute to our work by providing rigorous research results and stimulating debate. While they may not necessarily represent the position of the FCA, they are one source of evidence we may use to discharge our functions and inform our views. We strive to ensure research outputs are accurate, through checks including independent referee reports, but the nature of such research and choice of research methods is a matter for the authors using their expert judgement. To the extent that research notes contain any errors or omissions, they should be attributed to the individual authors, rather than the FCA.