Homebuyers with spotless credit records are being warned that they could find it difficult to take out a new mortgage as banks continue to tighten their lending criteria.

Banks and building societies are rejecting loan applications at short notice as house prices continue to fall and they become increasingly jittery about the growing threat of unemployment. Ray Boulger, of John Charcol, the mortgage broker, says: “Borrowers who suffer a fall in income this year will really struggle to remortgage or find a new deal. Some lenders will turn these borrowers away; others will offer interest rates that are so uncompetitive that it is hardly worthwhile.”

Even borrowers with deals that have several years to run are not safe. Banks have been writing to homeowners to demand that loans are repaid in full within 30 days, long before the end of the mortgage term. Most mortgage contracts contain a clause that allows the lender to pull the plug on the agreement, even if the borrower is not in arrears.

In fact, legal experts say that the latest mortgage contracts are littered with vague and open-ended terms and conditions that allow lenders to do almost anything. For example, the conditions attached to a mortgage can be changed “for any valid reason”, according to a contract from one leading lender.

Caroline Roberjot, a partner at Charles Rogers, the firm of solicitors, says: “Homeowners need to read the terms and conditions more carefully than ever before. It could be argued that a clause allowing lenders to withdraw credit with 30 days' notice is unreasonable, but this has yet to be tested in a court of law.”

Gordon Brown has been putting pressure on lenders to boost mortgage lending and reduce rates in line with the Bank of England base rate, but even state-owned lenders have refused. Last week Northern Rock said that it was passing on only half of the latest base-rate cut to its variable-rate mortgage customers - 0.25 per cent rather than the full half a percentage point.

The Council of Mortgage Lenders (CML) recently reported the lowest level of new lending on record and has admitted that the situation is likely to grow worse in the coming months because of the bleak economic outlook. For the first time since such figures were recorded, in 1965, banks and building societies will collect more in mortgage payments than will be lent to new customers.

Sue Anderson, of the CML, says: “Banks are struggling to source funding to offer new mortgages. Most banks now use retail deposits to fund lending, but low interest rates do not help banks and building societies to attract savers. This is the biggest problem facing lenders and the only thing they can do is to pick customers who pose the safest risk.”

Against this difficult backdrop, experts say that banks are using any excuse to reject customers. If a lender suspects that a borrower has submitted an application with information that is not 100 per cent accurate, it is likely to be refused. A change in circumstances can also worry lenders, says Robert Sinclair, of the Association of Mortgage Intermediaries.

Banks are also examining the credit histories of new customers more closely than ever. Lenders have been known to reject applications because of missed mobile phone payments or because a borrower has been overdrawn on his or her bank account too frequently.

Lenders have also tightened the rules on income multiples. Many banks are unwilling to offer loans worth five or six times a borrower's salary, which was common during the boom times. Performance-related income, such as bonuses, is also now routinely excluded from affordability assessments. If a borrower secured a previous deal with high income multiples, banks will be wary of extending the same level of credit again.

There has also been no let-up for first-time buyers. One mortgage deal in four now requires a deposit or equity stake of 40 per cent, according to Moneyfacts.co.uk, the financial website, as lenders seek protection against falling house prices and the risk of negative equity.

Mortgages aimed at borrowers with smaller deposits are limited and considerably more expensive.

Cheltenham & Gloucester, owned by Lloyds TSB, is offering a three-year deal fixed at 4.09 per cent on loans up to 60 per cent of a property's value. However, borrowers who require up to 85 per cent loan to value (LTV) are charged 5.69 per cent, an extra £200 a month on a £150,000 interest-only mortgage.

The emphasis on low-LTV lending means that falling house prices are also a headache for homeowners who need to remortgage.

A £150,000 mortgage on a home worth £200,000 has an LTV ratio of 75 per cent, which is the maximum available now from a number of leading lenders. But if that home falls in price by 15 per cent, the same mortgage has an LTV ratio of 88 per cent.

David Hollingworth, of London & Country, the mortgage broker, says: “Homeowners who need to find a new deal above 75 per cent LTV face a considerable rise in monthly mortgage repayments, if they can find a deal at all. Hundreds of thousands of borrowers will choose to revert to their lender's standard variable rate while the number of deals available is so limited.”

There are ways to make yourself more attractive to lenders. Borrowers who do not need to remortgage or move house in the next year should pay off both capital and interest each month and overpay whenever possible. This will ensure that they have the maximum amount of equity possible when the time comes to take out a new deal. Mr Hollingworth says: “Some mortgage providers will charge a penalty for this, but most will allow borrowers to overpay by up to 10 per cent a year. This puts homeowners in a much stronger position.”

You should order a copy of your credit record to check that all the information about you is correct. You can apply directly to the credit-reference agencies - Experian, Equifax and Callcredit - for your file.

Mrs Anderson says: “It makes sense for borrowers to resolve any problems that would show up on a credit report by contacting the lender and clearing the debt.”

If borrowers think that a bank is acting unfairly, Emma Parker, of the Financial Ombudsman Service (FOS), recommends writing to complain. If the institution in question does not respond, contact the FOS. “We can ask that lender to pause action against a borrower while we investigate,” she adds.

Borrowers who have received demands from a bank about changes or amendments to an existing mortgage deal should try to contact a customer relationship manager, Mrs Roberjot suggests.

Alternatives to traditional personal loans

Prospective mortgage borrowers have very limited options, but consumers who require a personal loan could consider a number of alternatives to the traditional high street lenders.

Zopa is an online network where members lend money to each other, cutting out the need for banks. It is free to join and loan rates vary depending on your credit history. The typical rate for a £5,000 loan over three years is 8.2 per cent, comparable with the cheapest rates on offer from banks. Zopa charges borrowers a £94.25 transaction fee for each loan.

Credit unions offer an alternative form of lending for borrowers with a poor credit history but can be more expensive than traditional lenders. There are now 400 financial co-operatives offering loans and savings accounts to about 400,000 members. For more information, visit www.abcul.coop.

The government-run Social Fund offers interest-free means-tested loans to households that need immediate short-term cash. The scheme includes maternity and funeral loans. It also offers crisis loans to households in an emergency. Visit your local Citizens Advice Bureau for more details.

There has also been a rise in the number of desperate consumers turning to pawnbrokers and short-term “payday” loans that have punishing interest rates.

Beccy Boden-Wilks, of National Debtline, the debt charity, says: “In a limited number of situations short-term credit facilities are useful, but the danger is that borrowers get into the habit of using credit to cover a shortfall in their income.”

Case study

Klaus Thorup, above, switched his current account and spent months filling out forms and chasing staff to secure a competitive mortgage from First Direct, the online bank owned by HSBC. So he was shocked to be rejected at the last hurdle.

The 33-year-old was told after an interview in October that he met the lending criteria for a lifetime tracker mortgage, pegged at 0.99 percentage points above the base rate. He was applying for a £355,000 loan to buy a new-build flat in Putney Hill, southwest London. But after three months First Direct reversed its decision.

Mr Thorup, who works in IT, says: “I was extremely frustrated that it took so long to find out that I would not be able to get a deal.”

First Direct said that it was concerned that Mr Thorup included a bonus as part of his salary on his application. It was also concerned that he had a buy-to-let property.

“I gave First Direct all these details at the initial stage and was told it would not be a problem,” Mr Thorup says. “It took me six weeks to change my current account and I have now had to switch it all back.”