Lenders cut their mortgage rates last week despite Bank rate being kept on hold for the eighth consecutive month, but brokers warned that many good-risk borrowers were struggling to access the top deals, with up to half of applicants being turned down at some lenders.

Government-owned Northern Rock led the rate cuts, reducing its trackers by up to 0.5 percentage points, followed by Nationwide, Britain’s biggest building society, which shaved 0.2 points off its deals.

Northern Rock now has the cheapest two-year tracker at 2.09 percentage points above Bank rate, or 2.59%, and the top two-year fix at 3.65%. It is also among the best for its five-year fix at 4.99%. The state bank is under pressure to pull in customers after figures last week showed it lent only £2.3 billion in the first nine months of the year, against its £4 billion target for 2009.

David Hollingworth at L&C, the broker, said: “Northern Rock has become the driving force in the recent spate of competition between mortgage lenders.”

However, brokers said they were struggling to place business with Northern Rock due to its strict lending criteria, which rule out even those with a perfect credit record but who rarely borrow. Simon Gammon at Knight Frank Finance said: “People who have never put a foot wrong are being rejected alongside those with a poor credit history, simply because they don’t have enough track record of borrowing. Northern Rock says it’s an active lender, but its undisclosed criteria are so stringent many can’t access its deals — between 30% and 50% of applicants are being declined.”

Brokers said the new crop of mortgage rates could be as good as it gets as rates in the wholesale market are on the rise. Five-year swap rates, which lenders use to fund fixed deals, have jumped 0.35 points in the past month while Libor, used to price tracker rates, has edged up 0.05 points.

Northern Rock will also have to comply with tough EU restrictions in the new year, which means it will not be able to offer mortgages in the top three best buys.

Melanie Bien at Savills Private Finance said: “If an attractive rate is within reach, it makes sense to secure it rather than bide your time in the hope rates will go lower.”

Northern Rock said credit scores were one factor used to determine its lending.

HSBC has also been accused of turning down low-risk borrowers. Madeleine Blackburn, 61, from Shoreham Beach, West Sussex, wrote to Money after HSBC refused her a £100,000 mortgage on a property worth £250,000, despite her having rental income from an investment property and £160,000 in savings with the bank.

“I’ve banked with HSBC for more than 15 years, also using it for business banking,” she said. “When I retired six years ago, my company was turning over £2m a year. My cashflow was excellent and I never once needed a loan or overdraft. It seems I have too much money to qualify.”

HSBC said that Blackburn’s rental income was not guaranteed.

If you have had problems getting a mortgage, let us know at money@sundaytimes.co.uk

How to secure the best deals

With lenders rejecting up to half the applications for their top deals, we show how you can increase your chances.

Improve credit score

Just as having defaults on your credit file will lower your score, not having had enough credit in the past can result in a poor showing.

If you are aware of such a problem and are planning to buy a property in the near future, take out a couple of credit cards that offer a reward and use them regularly, paying off the balance in full each month. American Express Platinum is the best cashback card on the market at present, said Moneyfacts, the data provider.

Try a private bank

Private banks may be more flexible with their lending criteria, although you will generally need at least £1m in assets.

Simon Gammon at Knight Frank Finance said private Middle Eastern banks such as Ahli Bank and Bank Leumi, as well as Britain’s Barclays Wealth and HSBC Private Bank, were negotiating rates of typically around 1.75 to 2 points above Bank rate.

Fix or track?

If you need to remortgage, first check your lender’s standard variable rate (SVR). Nationwide building society and Cheltenham & Gloucester charge just 2.5%, so you would probably be better staying where you are. However, Halifax charges 3.5% and the average SVR is around 4%.

Borrowers who want security should be looking to fix for at least five years, otherwise they will come out of the deal when Bank rate is rising.

Ray Boulger at John Charcol, the broker, believes there is a case for netting a five-year fix at less than 5%. The best is HSBC’s at 4.95%, with a £999 fee for borrowers with a 40% deposit.

If you would prefer a variable rate, Northern Rock has the cheapest two-year tracker at 2.59%; Abbey has the top three-year tracker at 2.19% over Bank rate; and Woolwich has the best lifetime tracker at 2.29% plus Bank rate.