Bank of England plans to remove interest rate check for mortgag

The Bank of England has announced plans to ease mortgage lending rules in a move that could help first-time buyers get on to the property ladder. The Bank's financial policy committee (FPC) said that it was "minded" to withdraw the rule that forces banks to check that potential borrowers could afford a 3 percentage-point rise in their mortgage interest rate above the lender's standard variable rate. Scrapping the requirement could help 1% of renters in Britain currently not able to meet the affordability test. A further 6% of mortgage borrowers would also have been able to secure a bigger loan if the rule had not been in place. The Bank said a rule limiting some new mortgages to 4.5 times a borrowers' income, as well as separate affordability criteria set by the Financial Conduct Authority, were sufficient to guard against excessive risks in the mortgage market. It will consult on the change in the first half of next year. 

Daily Mail (13/12/2022)   Financial Times (13/12/2022)   The Daily Telegraph (13/12/2022)   The Guardian (13/12/2022)