Hundreds of thousands of borrowers have been warned that they will be frozen out of the top new mortgage deals as the clampdown on lending by Britain’s major banks and building societies gathers pace. Sunday Times

Brokers have warned that lenders are becoming increasingly cautious. Even applicants with an impeccable credit record are finding it difficult to secure the best deals as the credit crisis worsens.

Borrowers with little or no equity in their homes face big increases in repayments when their existing deals end after Lloyds TSB and the Royal Bank of Scotland pulled their mortgages for those with deposits of less than 10% last week.

Banks and building societies are raising their rates for new borrowers. Halifax, the largest mortgage lender, is increasing the interest rate on its mortgages on Tuesday, adding up to £600 a year to the cost of an average loan.