Homeowners will miss out on the full benefit of interest rate cuts next year because mortgage lenders are planning to tighten their belts in response to the credit crunch.

The Bank of England signalled earlier this week that interest rates could be cut twice by next summer, but mortgage lenders have indicated that they may refuse to cut their standard variable rates (SVR) in turn, as they try to protect their profit margins.

This will further stretch homeowners whose finances are already under pressure.

The proportion of homeowners who pay out more than half their pre-tax salary on their mortgage has doubled in two years to 4.8 per cent, according to Bank of England figures released earlier this week. One in three mortgage borrowers now devotes more than 20 per cent of gross income to repayments, the figures showed.

Leading lenders including Halifax, RBS, Lloyds TSB and Barclays said yesterday that they could not guarantee that borrowers would benefit from any base rate cuts next year.

Melanie Bien, director at independent mortgage broker Savills Private Finance, says: “Lenders are desperately trying to increase profit margins on the back of the global credit crunch and difficulties in the market. Raising their rates, or failing to cut their SVR in line with the base rate is an easy way of doing this. We expect more lenders to follow suit next year, even if interest rates do fall, so borrowers need to be on their guard.”

Some mortgage customers are already feeling the pinch. Earlier this week Standard Life Bank raised its SVR by 0.15 percentage points to between 7.46 per cent and 7.66 per cent, though there has been no movement in the base rate since August. The bank blamed “recent significant changes in the mortgage market” for its move.

Wealthier borrowers who have substantial savings are also being hit. Customers of Intelligent Finance, the offset lender and an arm of Halifax, the UK’s biggest lender, are no longer able to remortgage on the lender’s most competitive deals. Instead, those who have come to the end of a fixed-term deal will have to choose between paying its more expensive SVR at 7.25 per cent or remortgaging with a rival lender as part of a pilot scheme.

The bank denied this move was linked to market conditions, although a spokeswoman said: “We appreciate that the timing is not great."

Lenders are keen to increase their cash reserves after bad debts on US sub-prime mortgages caused market turmoil.

Homeowners typically pay their lender’s SVR if their fixed-term deal comes to an end before they organise another short-term mortgage deal. Many variable rate deals are also linked to this rate. But some borrowers also have variable rate mortgages linked to their lender’s SVR. While tracker deals move in line with the base rate, discounted deals move in line with SVRs, meaning that while some mortgage borrowers will benefit from rate cuts, others may not.

Ray Boulger, technical manager at John Charcol, the mortgage broker, said: “Every lender will be broadly in the same boat, however some will be cushioned by savers’ deposit accounts, while others may wait until the bank rate falls, and then decide whether or not to pass on the decrease, rather than increasing their SVR now.”

Mortgage borrowers on fixed-rate deals are not immune from rising bills. Even if rates are cut two or three times next year, most of the 1.7 million homeowners due to come to the end of their mortgage deal are likely to pay more each month for their new deal, as the base rate will not be as low as when they took out their original mortgage.

What do homeowners have to fear from the credit crunch?

Next year is set to be a gloomy one for homeowners with stagnating house prices and more expensive monthly mortgage bills. Much of the blame for this turn of events is being cast on the “credit crunch”.

What is the credit crunch?

This is the term given to the turmoil in financial markets triggered by the failure of millions of US sub-prime borrowers to meet their home-loan repayments. Many financial institutions that bought chunks of debt from the sub-prime lenders were hit hard. But there was little information about how heavily each bank was involved. As a result, banks became suspicious of each other. Northern Rock, which relied heavily on borrowing from other banks, ran into difficulties at this stage.

What has the credit crunch got to do with house prices?

Confidence in the property market has changed since the credit crunch. The Royal Institution of Chartered Surveyors reported this week that new properties have flooded the market as would-be sellers make a dash for the exits, with the number of homes on estate agents’ books rising by 9 per cent in October.

So is the value of my home going to fall?

Nationwide has predicted that average house prices will remain static next year. Since inflation is currently at 2.1 per cent, this means that in real terms, the average property will be worth less. But the real key to whether your property will be worth less or more next year is location, the type of property it is and how much it is worth. Homes worth under £350,000 are most vulnerable.

What about my mortgage payments?

Many lenders, especially those offering home loans to those with credit problems, rely on other banks buying chunks of their debt. The credit crunch means that this route of funding is much more expensive, and so lenders have had to find other ways of raising money. One way they can do this is by raising mortgage rates, or not passing on rate cuts to their customers, making home-loan repayments more expensive.

But surely I can remortgage to a better deal?

Yes, you can. But those with credit problems and people borrowing more than three quarters of the value of their home will find it increasingly difficult to shop around for a mortgage. Many sub-prime lenders have withdrawn mortgages for those with no deposits and for “self-certification” home loans, which are granted when there is no proof of income. Even those with a clean credit record may find it more difficult to get a new deal. In addition, the mortgage fees have increased. Two years ago the average fee charged by a lender for setting up a home loan was about £399. Now it is not unusual to pay £1,000 or more.

Are any of my other bills likely to rise?

Yes. Some lenders are increasing credit card rates for existing customers. There have been more than 125 separate rate and fee increases in the past two months. This week Capital One raised the rate on its Classic Visa by between 3 and 5 percentage points, blaming “market conditions”.

Can’t I just get more credit?

It will be trickier to do this. Lenders are increasingly circumspect about extending credit. About half of credit card applications are now turned down, up from a third last year.

Is there any good news?

Yes. Savings rates are quite attractive at the moment as banks try to get extra cash to back up their mortgage loans. Coventry Building Society offers 6.51 per cent on its Online Saver account while West Bromwich Building Society offers 6.5 per cent on its mini-cash Isa.

But banks are keen to lure savers who leave their money untouched. Savers who reguarly dip into their rainy day fund will not be able to command top returns.

Is there anything I can do to improve my attractiveness to lenders?

Yes. You should order a copy of your credit record to check that all the information that is held about you is correct. You can do this by contacting Experian, Equifax or Callcredit. Lenders will contact these credit reference agencies when deciding whether to offer you a mortgage, loan or credit card. Lenders also check the electoral roll, so make sure you are registered. You can do this by contacting your local council.