Halifax, the UK's biggest mortgage bank, this morning raised rates on tracker mortgages, effectively "rationing" mortgages for new borrowers.

The bank has raised rates on popular tracker deals, by up to 0.20 percentage points. A remortgage borrower taking out a two-year tracker rate deal will now pay 5.44 per cent, compared to 5.24 per cent. A first-time buyer taking out a Halifax tracker will now pay 5.64 per cent instead of 5.44 per cent

The move comes less than a week after the Bank of England cut the base rate from 5.5 to 5.25 per cent and is the second time Halifax has put up tracker rates for new borrowers in the last two weeks. The bank raised rates by up to 0.4 percentage points before the base rate cut.

Tracker deals, which track the base rate, have become more popular over recent months because of expectations of base rate cuts. However since last summer's credit crunch, liquidity problems among mortgage lenders have forced many to increase rates on new loans. Lenders are now making an extra margin of around 0.5 percentage points on loans compared with this time last year to compensate for the chronic lack of funding, according to brokers.

Experts said that Halifax was rationing loans because it cannot cope with the demand for its most competitively-priced deals under current market conditions.

Melanie Bien, director at independent mortgage broker Savills Private Finance, says: "Halifax did offer some of the leading tracker rates so is likely to have been inundated with business. This would explain why they have pulled these rates at such short notice and are repricing them upwards. This effectively prices them out of the market, as there are better priced rates available. Continued liquidity issues mean lenders are looking to improve margins where they can."

The move is seen as part of a wider trend of "leap-frogging" among lenders, who are competing to avoid business rather than to bring in new customers. Ray Boulger, of John Charcol, another broker, said: "Lenders like Halifax are effectively rationing loans. They are generating the amount of business they want and then rejecting it when they can no longer cope with demand. Lenders are leap-frogging each other to the bottom of the best-buy tables. They are no longer competing for business, they are competing to avoid it."

The move will put further pressure on the Bank of England to reduce the base rate again next month, as borrowers taking out a tracker would need at least one more cut to get the same value as they could one year ago.

The best tracker currently on the market is from Nationwide, which is offering a two-year trracker at 0.18 per cent over base rate for two years with a pay rate of 5.48 per cent and a £1,499 fee.