BoE Scraps Mortgage Affordability Test

By Alex Davidson (June 20, 2022, 3:12 PM BST) -- Britain's central bank said on Monday that it will withdraw its recommendation that lenders should test whether new home buyers can afford to take out a mortgage against possible interest rate rises.

There are simpler ways to limit the risk to the financial system from looser lending, the Bank of England said.

The central bank's Financial Policy Committee, which tackles emerging risks, will remove from Aug. 1 its "affordability test" recommendation, under which lenders assess whether new borrowers could afford their mortgages if the borrowing rate rises three percentage points in five years.

"It will be up to individual lenders as to...

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