PRA has issued a policy statement setting out final rules in relation to loan to income ratios in mortgage lending. The rules support PRA’s intention, following the implementation of the Mortgage Credit Directive, to keep second and subsequent charge mortgage contracts excluded from the loan to income (LTI) flow limit. This follows consultation on the exclusion (see FReD 19 February), to which the statement also provides feedback. Without the exclusion, the LTI flow limit would have automatically applied to second and subsequent charge mortgage contracts from 21 March onwards. The CRR Firms, Non CRR Firms: Housing Instrument 2016 takes effect from 25 March to reflect this decision. (Source: PRA sets out rules for loan to income ratios)