The new loan rules
■ All borrowers will have to satisfy lenders they can afford the mortgage and provide evidence of their income
■ High loan-to-value mortgages will still be allowed as long as the borrower shows they have a credible repayment strategy
■ The same tests will apply to interest-only mortgages – a lighter regulation than the complete ban some lenders had feared would be implemented
■ Existing borrowers might not be able to meet criteria if their home’s price has fallen – but in that case the lender can ignore the rule, as long as the borrower’s total debt does not increase
■ Lenders can be flexible on what type of evidence of income to accept from self-employed customers to ensure such applicants can still access credit
■ Almost all mortgages will be “advised” to make sure borrowers understand the products they are taking out
■ But small changes to contracts will not need this safeguard, as long as there is no rise in the amount to be repaid
■ High net worth borrowers can opt out of receiving advice, and need a less tough affordability check because of their strong financial positions
■ Business customers borrowing against their homes will also face less tough checks
■ The rules are set to come into force in April 2014