The amended rules will apply from 11 July and mean that the 15% lending flow limit will be raised from the £100m threshold set in 2014 to £150m.
Lenders will be restricted to lending at no more than 15% of their mortgage book if they exceed £150m in the value of mortgages advanced per four rolling quarters.
This is expected to allow smaller lenders to write more mortgages before the rules or guidance apply.
Around 70 lenders are exempt from the current £100m LTI flow limit, and the regulators said raising the limit to £150m would benefit around 80 lenders.
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Lenders want fewer barriers
In April, the PRA announced it would consult on changes to the high LTI lending threshold and responses from the three lenders who gave feedback suggested they wanted regulators to introduce looser rules.
Two lenders said the threshold should be increased to £200m and £250m respectively, and all three said a higher threshold would increase competition and growth, particularly with smaller, niche lenders.
One lender said the threshold should be removed completely.
Regarding the 15% limit, some lenders suggested removing this altogether while others said there should be a tiered approach.
It was also suggested that there should be an exemption for longer fixed rate products.
