On March 19, 2026, the US banking regulators released a proposal to revise the Basel framework that will govern bank capital requirements. In this paper, the authors discuss how the revised framework would affect the mortgage market. They conclude that it would have a moderate impact as drafted, primarily by incentivizing banks to originate and hold more lower-risk mortgages and encouraging nonbanks in the mortgage market to pursue bank charters or partnerships with banks to take advantage of the changes and remain competitive. The revised framework’s impact would be more substantial if policymakers were to clarify the definition of “regulatory residential real estate exposure,” expand the definition of “securitization,” and give credit for the transfer of mortgage credit risk, attracting greater bank participation in the market and providing a larger mortgage rate reduction for most borrowers.