New offset products include a two-year 4.49% fixed rate or a fee-free option of 4.79% fixed, both available at 65% loan to value.

Nationwide, the country's largest building society, has said it will not pass on any more interest rates cuts to mortgage borrowers with tracker loans, to protect the interests of savers, who outnumber borrowers by seven to one.

The move will be a controversial one, as tracker loans are supposed to charge interest rates that follow the Bank of England Base Rate, and a further cut in the rate charged by mortgage lenders would be expected if, as widely predicted, the Bank cuts its Base Rate  by another half percentage point when the Monetary Policy Committee holds its first meeting of 2009 next week.

The cheapest standard variable rate mortgages in 2008 were offered by First Direct, Direct Line and HSBC.

In the mutual sector the Nationwide and the Skipton building societies were the cheapest, and occupy fourth and fifth places respectively, according to Defaqto's annual survey of the largest lenders.

Homeowners have largely stopped taking out new loans secured against their properties to fund spending, according to the latest figures from the Bank of England.

"Mortgage equity withdrawal" has fallen for the second successive quarter as borrowers rein in spending and attempt to pay down their home loans. Borrowers injected a net total of £5.7bn into housing equity - in other words, repaid their miortgages - in the third quarter, the highest quarterly figure since records began in 1970.

Mortgage lending by the big banks hit a new low in November, when they fell by 14% to 17,773, according to the British Bankers’ Association. Approvals for house purchases were 60.7% lower than in November 2007.

With banks demanding a bigger deposit from buyers, the average amount borrowed by purchasers in November was £117,000, down almost 24% on a year ago.

The outlook for the mortgage market is still grim, according to figures out today from the Council of Mortgage Lenders. They reveal that gross mortgage lending has now fallen a staggering 51% from November last year and 22% on October.

While there is typically a decline from October to November, this is considerably larger than usual, says the CML. This reflects the market disruption and continued deterioration of confidence in the economy.

The CML is today also publishing mortgage market forecasts for 2009, but cautions that, in the current challenging environment, the forecasts need to be seen as indicative rather than as a precise assessment of likely activity.

Cuts in interest rates are failing to bring mortgage costs down significantly for new loan deals, with the rate on new tracker deals falling by less than a percentage point.

After a third attempt by the Bank of England to kick-start the economy by slashing base rates, enthusiasm for cheaper lending among banks and building societies has been notable by its absence.

Mortgage lending rose a little in October compared with a month earlier, according to figures from the Council of Mortgage lenders, but slumped by more than half compared with a year earlier.

There were 39,900 house purchase loans in October, worth £5.5bn, an increase of 14% in volume and 10% in value from September, but an annual decline of 52% in volume and 57% in value.

Halifax’s decision to waive the collar on its mortgages could cost the beleaguered lender up to £575 million a year.
 
The bank had a floor on its tracker products of 3%, which meant that the rates paid by borrowers could not fall below this figure plus their tracking margin. However, Halifax has, like other banks, decided to yield to pressure from the Government and disregard the clause in its contracts that enforces the floor.

The bank, which is being supported by taxpayers' money and is due to merge  with Lloyds TSB early next year, is falling into line with other major lenders whose borrowing rates follow the Bank of England with no limit.

The offset product tracks the Bank of England base rate for the life of the loan. It is priced at 1.49% above the base rate and is currently 3.49% (APR 3.6%). The mortgage has a £599 arrangement fee and maximum loan to value of 80%.

Many people facing repossession of their home will be able to defer mortgage payments for up to two years, under 'mortgage holiday' proposals announced by Prime Minister Gordon Brown during a House of Commons debate on the Queen's Speech today.

The plan is designed to give a breathing space to those who lose their jobs or take a big reduction in their income. It will cover mortgages of up to £400,000, according to the BBC.

Only 32,000 mortgages were approved in October, 1,000 fewer than in the previous month, according to figures from the Bank of England.

The value of mortgage loans in October was almost 70% lower than in September, at £459 million - the second lowest figure on record, and just 6% of the level a year ago.

The Royal Bank of Scotland (RBS), which also owns NatWest, has promised not to start repossession proceedings against customers who fall behind with their mortgage payments for at least six months to give borrowers "a breathing space".

Stephen Hester, the new chief executive, is reported to have given the undertaking without pressure from the Government, which had said that it was prepared to take action against banks which do not treat customers fairly.

Northern Rock raised interest rates today on most of its mortgages for new borrowers.

One- and two-year fixed-rate deals are increasing by 0.2% and the three-year deal by 0.3%.

The two-year fixed rate has gone up from 4.99% to 5.19%, with a 25% deposit and a £995 arrangement fee

The number of mortgages for house purchases approved by the biggest banks fell to 21,584 in October, 52% fewer than a year earlier, according the to the latest figures from the British Bankers' Association (BBA).

Last month, net mortgage lending by the banks rose by £2.9bn. The average for the previous six months was £3.9bn.

Chelsea Building Society is cutting its standard variable rate to 5.79%,  with effect from 31 December. This change is following on from the Bank of England base rate change on 6 November.

Nationwide Building Society is cutting the price of its two-year fixed rate mortgage deals to 4.98% with a £599 fee, and selected three- and five-year fixed rate deals by up to 0.80%. The society will also be withdrawing its 10- and 25-year fixed rate products.  

Abbey is cutting rates by up to 0.5 per cent on all its 3-year fixed-rate mortgages from 60 to 75% loan to value from 21 November.

Last week, Abbey reduced the rate on its 2-year fixed-rate mortgages to 4.4% with a £995 fee for 60 % LTV and 4.79% with a £995 fee for 75% LTV.

Home sales in Britain have fallen to at least a 30-year low over the past three months, according to the Royal Institution of Chartered Surveyors (Rics).

The culprit is the shortage available mortgages, which is "stifling" the housing market, Rics says.

The temporary increase in the stamp duty threshold saw 51% of homebuyers avoiding stamp duty in September, compared with 22% in September last year. However, the number of house purchase loans was 57% lower than in  September 2007, according to data published today by the Council of Mortgage Lenders. There were 35,000 loans for house purchase, worth £5bn, in September, down 15% in volume and 15% in value from August, and less than half September 2007 levels.

Nationwide Building Society has announced it will peg down its Base Mortgage Rate (BMR) from 1 December 2008 by the full 1.5%, matching this week's unprecedented cut in the Bank of England base rate. This means the lender's BMR will sit at a rock-bottom 4.69%, as opposed to its current 6.19%.  A borrower with a £100,000 interest-only mortgage will make a saving of £125 a month.  Existing tracker mortgages, which have to follow the base rate, will also decrease by 1.50% from 1 December 2008.

The Association of Mortgage Intermediaries (AMI) today called on the Bank of England to cut interest rates by 1% to help ease the problems facing the economy as a whole and the mortgage industry in particular.

Mortgage approvals for house purchases have fallen to the lowest level on record, and base rate cuts have yet to make an impact on mortgage rates.
 

The number of mortgages approved for British homebuyers increased in September for the first time in more than a year.

About 33,000 home loans were approved, 1,000 more than in August, when they reached a record low, according to Bank of England figures. Total lending was £2.2bn up in September, after falling by £691 million in August.

The number of people losing their homes for failing to keep up with mortgage repayments increased by 71% in the second quarter, to 11,054, according to the Financial Services Authority’s latest mortgager lending data, published today.

The FSA said the number of repossessions has been rising since September last year. So has the number of people falling at least three months in arrears with their mortgage repayments: cases were up 16% compared with a year earlier, at 312,000. The total amount of arrears now stands at £1.6bn.

Abbey is cutting by 0.15% the rate on its three-year fixed rate deal at 70 per cent LTV. From Thursday the rate will be 5.39%, with a £1,495 fee.

Fixed-rate mortgages have increased in popularity for the third consecutive month, with three-year fixes proving the most popular, according to Abbey’s latest index.

Mortgage lending may have slumped to its lowest monthly level for more than three and a half years, but Channel 4 News has discovered that mortgage fraud is booming, with ID theft as a major factor.

The Land Registry has told Channel 4 News that in 2007-2008 it paid out almost £4m in compensation to lenders and defrauded homeowners, compared to just over £2m in 2006-7.

Gross mortgage lending fell a further 10% in September on the previous month, to an estimated £17.7bn, according to new data from the Council of Mortgage Lenders (CML). This is a staggering 42% down from September last year. While a seasonal fall is typical between August and September, £17.7bn is the lowest gross lending figure since January 2005 and the lowest September figure since 2001.

The best mortgage products are increasingly being placed outside the grasp of mortgage intermediaries, according to a an IMLA broker survey published today. It found that over half of brokers (54%) complained that, having searched the market, the appropriate mortgage product was sometimes not available. Only around a fifth of brokers (22%) said this had not occurred. 

It's a week since the Bank of England made its early 0.5% cut to the base rate - yet only two of the building societies have announced they will be passing on the reduction in full to their borrowers with standard variable rate mortgages.

Nationwide, Britain’s biggest building society, is to cut its standard variable rate (SVR) from 6.49% to 6.19% from 1 November. This is less than the 0.5% reduction in the bank rate, from 5% to 4.5%, announced last week.

New borrowers who choose an SVR deal from Nationwide will be required to provide a deposit of at least 25% and will not be able to use a mortgage intermediary.

The number of loans for house purchases fell to 42,000 in August – the lowest number since monthly records began in January 2002, and 59% fewer than the same month a year ago, according to the Council of Mortgage Lenders (CML).

The total value of the loans was £6bn, 63% down on August 2007.

The interest rate cut from 5% to 4.5% yesterday has prompted six mortgage lenders to reduce their rates.

Halifax, Woolwich, Lloyds TSB (which also owns the Cheltenham & Gloucester brand), First Direct (part of HSBC), Royal Bank of Scotland and NatWest all announced they were going to cut their standard variable rate (SVR) by half a percentage point.

A two-year fixed-rate deal for a purchaser with a 25% deposit will now be at 6.05%, with a £999 arrangement fee.

The number of mortgage products available continues to dwindle, as lenders cull their ranges as well as the amount of cash they are prepared to lend.

"Monday saw one of the largest declines in mortgage products ever seen in a day, with 11.4% of products being culled. At the start of Monday there were 3,914 mortgage products on the market, today there are just 3,469." says Michelle Slade of data provider Moneyfacts.

Mortgage lending slumped to a record low last month, 95% below the level achieved in August a year ago, Bank of England figures show.

Net lending was only £143 million during the month, just 5% of a year ago and a fraction of July's sum of just under £3bn. This was the lowest level since records began in 1993.

HSBC, Woolwich and First Direct are all raising their mortgage rates from today, reflecting the rising cost of obtaining funds through the money markets. Other lenders may follow suit.

HSBC is increasing fixed-rate deals for new borrowers with a 10% deposit by 0.3%, to 6.27%. A £150,000 mortgage will now cost £27.46 a month more. Fees for new borrowers who can only muster a small deposit will also increase, but those able to put down a 25% deposit will see their costs fall by 0.2% on a fixed-rate deal.