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 higher-risk, according to the Financial Times. Under current rules, lenders must apply stricter affordability checks to a portion of their mortgage book — typically loans at high loan-to-income multiples. Adjusting that threshold would change how much of a lender's lending falls inside the stricter category.

The significance lies in credit supply rather than any single rate decision. If the bar for "high-risk" lending moves, lenders could gain flexibility to extend more credit to borrowers with larger income multiples, or the change could be calibrated to keep guardrails intact. For markets, the signal matters: it suggests regulators are weighing how far they can safely support mortgage availability without loosening prudential standards too far.

What to watch: the BoE's formal consultation and any published calibration, how lenders respond in product pricing and criteria, and whether the change is framed as a temporary or structural adjustment. Until details are confirmed, the report should be treated as indication of regulatory direction, not settled policy.