Bank of England plans to cap mortgages beginning from October
The Bank of England released its financial stability report:
- BoE plans to cap mortgages beginning from October;
- 85% of mortgage approvals would need to be below 4.5 times of the borrowers' income;
- BoE plans to test banks, whereby borrowers could repay the mortgage even if interest rates rise to 3%;
- No new mortgages around the limit of 4.5 would be allowed.
The Bank of England Governor Mark Carney said at the press conference today:
- The recovery in the U.K. economy is strengthening;
- The housing market is the main risk to the U.K. economy's stability.