I've recently applied for a first time home loan at several banks. One of the banks replied with a "approved in principal" letter which left me a bit confused and worried. They offered me a fairly high interest rate at a lower repayment period, which pushes my Repayment to Loan value up to 34%.

I was under the impression that the generally talked of 30% RTI limit was legally set. Is this the case, or is it just a general guideline?