Bank of England may raise high-risk mortgage threshold: FT - The Business Times

The Bank of England is reportedly considering raising the threshold at which mortgages are classified as high-risk, according to the Financial Times. Under current rules, lenders must cap the share of new mortgages above a certain loan-to-income multiple — part of the post-2008 framework designed to guard against a build-up of household debt.

Any change would matter because it could affect how much lending banks can extend to borrowers with larger income multiples, potentially influencing mortgage availability and credit conditions. The Bank has not confirmed the report, so the proposal remains speculative and details such as the new threshold or timing are unclear.

For markets, the key question is whether looser lending constraints would support housing activity and bank credit growth, or whether policymakers judge existing safeguards sufficient. Watch for official Bank of England communications, consultation papers or Financial Policy Committee commentary that confirm, modify or dismiss the reported plan. Until then, treat the FT report as an unconfirmed signal rather than a policy change.