Around 27 of the UK's 102 lenders have not reduced their standard variable rate (SVR) in line with April's quarter of a percentage reduction, a month after the Monetary Policy Committee cut base rates, according to financial information group Moneyfacts.co.uk

The majority of those who have failed to pass on the reduction are small banks and building societies, with internet bank Egg also keeping its SVR on hold.

A further 18 lenders have passed on some but not all of the cut, including recently nationalised bank Northern Rock, which reduced its SVR by just 0.1 per cent.

Meanwhile, research carried out by mortgage group mform.co.uk showed that lenders are demanding increasingly high deposits from consumers in order for them to qualify for their best rates.

It said the average maximum loan to value ratio (LTV) for best-buy mortgage deals was 87.6 per cent in April, down from an average of 91 per cent in May last year.

The fall has been even more dramatic for two-year fixed rate deals, with maximum LTVs on these products dropping to 85 per cent from 93 per cent.

Overall, four of the five mortgage types reviewed now have maximum LTVs of below 90 per cent.

Francis Ghiloni, mform.co.uk's marketing and business development director, said: "The credit crunch has not only seen mortgage rates and fees rise, it has also resulted in many lenders reducing their maximum LTVs."

The credit crunch has made lenders increasingly risk averse, and there are now no 125 per cent mortgages of 100 per cent deals left in the market.

At the same time the number of mortgages where borrowers need just a 5 per cent deposit has dived to just 204.

This compared with 241 different 95 per cent LTV products at the beginning of last week and 963 in July before the credit crunch hit.

But despite lenders continuing to pull deals with small deposits, the wider mortgage market appears to have stabilised in the past couple of weeks.

The number of different deals available has remained roughly the same at around 3,895, although this is well down on 15,599 different products in the market in July last year.

There also appears to have been a pause in the pace at which lenders are raising their mortgage rates, while Royal Bank of Scotland Group and Abbey have cut the cost of some of their deals.



Lloyds TSB has launched a mortgage which enables consumers to earn Airmiles as they repay their home loan. The lender believes its Airmiles mortgage, made available this week, is the first of its kind.

Under the deal people will receive 6,000 Airmiles when they first take out the mortgage, as well as an additional 50 for every month of the mortgage term.

This means that over a three-year period people could earn around 7,800 Airmiles, enough for a return flight to destinations such as Barbados, Hong Kong or Delhi, or five return flights to Barcelona, Rome or Prague, or six trips to the theatre with dinner for two people.

The deal is available on a range of three-year fixed rate mortgages, with rates starting at 5.89 per cent for someone with a 25 per cent deposit who paid a £995 arrangement fee.

People can also earn 100 bonus Airmiles if they take out Lloyds TSB's combined buildings and contents insurance. The move is the second stage of Lloyds TSB's partnership with Airmiles, after it launched its Airmiles credit card last year, which it said had been extremely popular.

Alison Burns, director of network mortgage sales at Lloyds TSB, said: "This new deal combines some of our most competitive rates, with a genuinely useful reward package."

Sean Gardner, founder of MoneyExpert.com, said that while the mortgage looked like a gimmick, it actually offered a competitive rate.

He said: "At first glance you could be forgiven for thinking Lloyds TSB had just launched a mortgage laden with gimmicks. But this is a genuinely good deal."