Mortgage cap change could boost access for first-time buyers nationwide.

Good News for First-Time Buyers: Mortgage Rules Just Got a Bit Friendlier

For anyone dreaming of getting on the property ladder but feeling held back by affordability tests or high rent costs, there’s a promising shift on the horizon. The Bank of England has announced a potential change that could make it easier for first-time buyers to secure a mortgage—even if it means borrowing more than before.

What’s Changing?
Currently, lenders are restricted when it comes to offering mortgages above 4.5 times a borrower’s income. Only about 10% of mortgages fall into this higher loan-to-income (LTI) category. But under the new recommendation from the Bank of England, lenders could have greater flexibility—allowing individual banks and building societies to increase this share beyond 15%, while still capping the industry-wide total.

“This will help people who struggle to get on the property ladder,” said Dame Debbie Crosbie, CEO of Nationwide, one of the UK’s largest lenders. High rents and living expenses have made it difficult for many to save for deposits or pass stringent affordability checks, so this move is a welcome shift for buyers who feel priced out.

What Could This Mean for You?
The Bank estimates this change could unlock up to 36,000 additional mortgages each year for borrowers with higher LTI needs. That’s potentially thousands of doors opening for people who previously couldn’t meet lending criteria.

What About Existing Homeowners?
There’s also some cautious optimism for current mortgage holders. While around 3.6 million mortgages will need to be renewed over the next three years—leading to an average £107 increase in monthly payments—this is still less than the £146 originally expected. And with interest rates slowly edging down following four Bank of England rate cuts since last August, some households (around 2.5 million, or 28%) could actually see their payments decrease.

Zooming Out: Global Shifts at Play
The Bank’s report also flagged growing global financial instability, especially linked to changes in the strength of the US dollar amid ongoing trade tensions. While UK households haven’t yet felt a direct impact, the Bank is keeping a close eye on international trends.

Bottom Line?
If you’ve been holding off on buying your first home, this might be the window you’ve been waiting for. Looser lending restrictions could make mortgages more accessible—without throwing financial caution to the wind.