Mortgage lenders will gain greater freedom to write loans at higher income multiples under final PRA and FCA policy published on 14 October. From 28 October 2026, the individual lender-level 15% cap is removed, while the regulators retain an aggregate framework intended to keep high loan-to-income lending consistent with the market-wide 15% recommendation.
For higher earners whose required mortgage has been constrained by a lender’s income-multiple policy, the change creates a reason to reassess the available options. It does not establish an automatic entitlement to a larger loan.
The distinction matters. A bank can have more room to undertake a type of lending without deciding to offer it to every applicant. The borrower still needs a lender whose income assessment, product rules and affordability requirements fit the case.
The Confirmed Change
PS19/26 and FCA guidance FG26/11 take effect on 28 October. The high-LTI definition remains 4.5 times assessed income or more. The reform changes the lender-level restriction, rather than introducing a new universal maximum income multiple.
Individual firms’ high-LTI flows and adjustment expectations use a rolling four-quarter measure. The aggregate market measure is monitored for each single calendar quarter.
4.5 Times Income Was Never a Universal Borrower Ceiling
The previous framework generally restricted the proportion of relevant new lending a lender could undertake at high income multiples. It did not make every mortgage above 4.5 times income prohibited.
That distinction explains why higher-multiple products could exist before this announcement. Access depended on the lender’s policy and the relevant lending capacity, alongside the applicant meeting its criteria.
It also means that a borrower previously told “we lend up to 4.5 times income” was not necessarily being quoted a market-wide legal maximum. They may have encountered that particular lender’s limit for their circumstances.
The new framework gives firms more flexibility to choose their higher-LTI strategy. The practical benefit will depend on how lenders use it.
A £200,000 Income and a £1.1m Mortgage
Consider a hypothetical applicant with £200,000 of annual income accepted by the lender. A £1.1m mortgage represents 5.5 times that income.
At 4.5 times, the arithmetic produces £900,000—a £200,000 difference. That gap can materially affect the property search even where the applicant has a substantial deposit.
The following figures show the multiplication only. They do not represent lender offers, affordability decisions or amounts newly available because of the policy.
| Income Multiple | Illustrative Loan | Difference From 4.5 Times |
|---|---|---|
| 4.5 times | £900,000 | — |
| 5 times | £1,000,000 | £100,000 |
| 5.5 times | £1,100,000 | £200,000 |
| 6 times | £1,200,000 | £300,000 |
A lender willing to consider 5.5 times income may still offer less after reviewing the household and property. Another may calculate the qualifying income differently. The useful comparison follows the actual application rather than selecting the highest multiple on a product page.
The Income Figure Matters as Much as the Multiple
An executive’s headline remuneration may include basic salary, annual bonus, deferred awards and other benefits. A lender may not accept every component in full or on the same basis.
If a £200,000 remuneration package produces £180,000 of accepted income, a £1.1m request is approximately 6.11 times that accepted amount. It is no longer a 5.5-times case.
For a company director, the relevant income might depend on salary, dividends, ownership and the lender’s treatment of business profits. The accounting period and sustainability of earnings can also matter.
Willow’s 13 October reporting on Barclays’ company-director criteria addressed the income-assessment side of this question. The regulatory development concerns a different part of the calculation: a lender’s capacity and appetite for higher multiples of the income it accepts.
Both deserve review. A higher maximum multiple applied to a narrower income figure may produce less borrowing than a lower multiple applied to a more suitable assessment.
Affordability Remains a Separate Test
The reform does not remove the need for the applicable mortgage affordability assessment. Existing FCA responsible-lending requirements remain relevant.
A household earning £200,000 can have substantial fixed expenditure. School fees, childcare, maintenance commitments, credit payments and other borrowing can affect the amount left to service a mortgage.
The proposed term and repayment structure also matter. A larger repayment mortgage over a shorter period has a different monthly commitment from a smaller loan over a longer period. Interest-only borrowing has separate eligibility and capital-repayment considerations.
The review should establish a payment the household can sustain alongside its other priorities. Passing an income-multiple test alone cannot answer that question.
Does Your Required Mortgage Exceed 4.5 Times Your Income?
Willow can review the income a lender would accept, the borrowing required and the criteria that previously limited the case. We compare confirmed lender options against your deposit, household commitments and property plans.
Review Your Residential Mortgage Options →Regulatory Permission and a Product Launch Are Different Events
Some firms may expand their higher-LTI activity using existing products. Others may change eligibility, introduce a dedicated range or retain their current strategy.
The announcement does not identify a new maximum available from every bank. Nor does the commencement date mean all lenders will revise their criteria on the same morning.
Higher-multiple lending is already visible in the market. Skipton’s published LTI Booster information, for example, describes lending of up to six times income for eligible clients, with conditions covering LTV, minimum income and product availability.
That is an example of a lender-specific proposition, not evidence that Skipton has changed its policy in response to PS19/26. It demonstrates why the next step is checking the actual product and borrower requirements.
When comparing options, establish the permitted loan size as well as the multiple. A product suitable for a modest higher-LTI purchase may not accommodate a £1m-plus mortgage.
The Aggregate Limit Still Matters
The PRA’s supervisory statement explains that if market-level high-LTI lending becomes inconsistent with the FPC’s recommended limit, regulators may expect relevant firms to reduce future high-LTI flows.
This means greater individual freedom operates within a continuing system-wide framework. It is not an unlimited expansion of high-income-multiple lending.
The distinction between measurement periods is deliberate: firms are assessed across four quarters for these purposes, while aggregate monitoring uses individual calendar quarters. It allows more gradual management of lender adjustments.
The practical implication for borrowers is to check current availability and keep the application up to date. A market announcement is useful context, but it does not reserve a future mortgage product or borrowing amount.
Why Some Borrowers May Have Seen Flexibility Already
The PRA’s implementation section recognises lenders using interim measures made available by the regulators. Those arrangements fall away when the final framework takes effect on 28 October.
The final policy therefore should not be presented as the first time any lender could use additional flexibility. For some firms, it formalises a transition already reflected in their approach.
For the applicant, the useful question is what the chosen lender can offer now and whether anything material changes for their case. Waiting for the date without checking the existing options could miss a suitable route already available.
Three Questions Before Assuming You Can Borrow More
What income will the lender accept? What multiple and product rules apply to your circumstances? Does the complete affordability assessment support the requested loan? All three answers are needed.
Who Should Revisit an Earlier Enquiry?
A review is particularly relevant where the household’s required borrowing exceeded a lender’s income-multiple ceiling but the wider circumstances remained credible.
That can include professionals moving to a larger home, executives with variable remuneration and directors whose income needs a specialist assessment. It can also include first-time buyers; the policy is not restricted to wealthy households.
The reason for the earlier shortfall needs identifying. If the obstacle was expenditure, an unacceptable property, credit history or insufficient evidence of income, removing a lender-level flow cap may not resolve it.
For an existing homeowner, establish whether the transaction involves additional borrowing. The framework’s scope excludes certain mortgages, including remortgages with no increase in the principal outstanding. The announcement should not be treated as a blanket change to every refinancing case.
A Larger Loan Still Needs a Complete Purchase Budget
Suppose a £1.1m mortgage supports a hypothetical £1.5m purchase. The price contribution is £400,000 and the loan-to-value is approximately 73.3%.
The household still needs the acquisition costs and the reserves it intends to retain. A borrowing increase should not be treated as spare cash if it is needed to cover a larger purchase price.
Compare suitable loan amounts with the planned payment, transaction costs and future commitments. It may be sensible to borrow less than the maximum even where a higher amount is available.
The ability to obtain a larger mortgage is useful when it supports the household’s plans. It is not, by itself, evidence that the more expensive property is the right decision.
This Does Not Create a New Asset-Based Borrowing Route
The high-LTI change concerns the relationship between the mortgage and assessed income. A client with substantial investments but limited qualifying income needs a separate analysis.
Some specialist or private-bank approaches may consider wider assets, but their criteria, costs and risks require individual assessment. They should not be inferred from this announcement.
Similarly, a large deposit can strengthen the security position without resolving every affordability question. Loan-to-value and loan-to-income measure different aspects of the case.
How Willow Private Finance Can Help
Willow can revisit an income-multiple shortfall by identifying exactly what constrained the original enquiry and assessing the current position.
We start with the borrowing needed, income sources, household commitments and property. We then compare suitable lender routes using confirmed criteria rather than assuming the regulatory announcement changes every lender’s appetite.
For accountants, wealth advisers and buying agents supporting higher earners, an early review can establish whether financing still limits the property plan and what evidence would improve the assessment.
The final framework creates scope for a more varied mortgage market. The client benefit comes from finding a lender whose approach fits the whole case and a loan the household can sustainably manage.
Frequently Asked Questions
Practical questions about higher income multiples and the new mortgage framework.
Is 4.5 times income a legal maximum mortgage amount?
No. The high-LTI framework concerns the share of relevant lending at 4.5 times assessed income or more. It does not impose a universal 4.5-times maximum on every borrower. Lenders retain their own loan limits and criteria.
What changes on 28 October 2026?
The final PRA rules and FCA guidance remove the individual firm-specific 15% cap while maintaining an aggregate framework consistent with the FPC’s 15% recommendation. Individual lenders gain flexibility, subject to risk management and possible future adjustment expectations.
Will I automatically qualify for 5.5 or 6 times income?
No. Availability depends on the lender, product, accepted income, household commitments, loan-to-value, property and other applicable criteria. Regulatory flexibility does not guarantee that a lender will increase its maximum or approve an application.
Can bonuses or retained company profits count towards my income?
Potentially, depending on the lender and the evidence. The amount accepted may differ from headline remuneration or business profits. The high-LTI change does not create a universal rule requiring lenders to accept those income sources.
Should I revisit an earlier affordability shortfall?
A review can be useful if the constraint was an income-multiple policy or limited higher-LTI availability. Reassess the complete current case and confirmed lender criteria. An earlier shortfall caused by expenditure, credit or property issues may remain.