FSA to cap mortgage borrowing

Homebuyers will be prevented from borrowing more than three times their annual salaries under new mortgage rules to be announced this week. As part of a package of banking regulations, 100 per cent mortgages will also be banned. Prospective homeowners will have to provide a deposit of at least 5 per cent, but many banks and building societies are expected to ask for larger amounts. Chairman of the Financial Services Authority Lord Turner is preparing a crackdown on executive bonuses that ‘reward risk-taking’, to require banks to hold greater levels of capital during boom years.