New rules to stop a resurgence in risky mortgage lending are likely to be imposed in 2013 by the Financial Services Authority (FSA).
The regulator's revised proposals still intend to bring in "common sense" standards that will stop home buyers borrowing more than they can afford.
Lenders are being told they must assess the affordability of loans better.
But some flexibility is being allowed for existing customers who might have been prevented from remortgaging.
Lord Turner, chairman of the FSA, said: "While the excesses of the pre-crisis period have largely disappeared from the current market, it is important to ensure that better practice endures in future when memories of the crisis recede and the dangers of poor practice return."
The regulator wants to stop any possibility of a return to the early years of the past decade, in which some lenders handed out mortgages with only cursory checks on borrowers' real ability to repay.
The most notorious examples were the "Together" mortgages offered by the Northern Rock bank, which granted loans worth 125% of the value of homes.
In some other extreme cases, lenders offered mortgages worth seven times a borrower's income, or allowed them to exaggerate their real income, especially in the case of "self-certified" mortgages.
The thrust of the FSA’s proposals, which are now going out to a further round of public consultation, is still that lenders must judge properly the ability of individual borrowers to repay.
"The proposals will see prospective borrowers - whether they are first-time buyers, right-to-buy tenants or home movers - get the right information and advice, at the right time, and ensure mortgage lenders will be properly checking each applicant's realistic ability to repay their mortgage," the FSA said