Many banks are refusing to pass the recent 0.5% interest rate cut onto their new tracker products.

Abbey announced it would be keeping rates for new applicants at existing rates while Lloyds TSB and its subsidiary Cheltenham & Gloucester have said they will only offer trackers to customers with a 25% deposit.

Ten banks have said they will pass the rate cut on to customers on their standard variable rate but this is thought to only affect 7% of borrowers who are already on the least competitive deals.

The banks are blaming the high Libor rate - the rate at which banks lend to each other - for the high cost of borrowing.

Government-owned Northern Rock and Bradford & Bingley have also so far failed to pass on the interest rate cut.

Meanwhile, research by Moneyfacts suggests the amount of mortgage products on the market for new borrowers has fallen to its lowest level since the start of the credit crunch.

There are now 3,281 different types of mortgage compared to 13,027 in July 2007.