Homebuyers are seeing the cost of mortgages continue to climb despite falling house prices.

Mortgage brokers say lenders are cold-shouldering 'risky' borrowers as they desperately try to improve their returns on loans.

Banks are tightening their lending criteria, offering borrowers fewer options and heavily penalising those with small deposits as they struggle to raise money themselves amid the global financial turmoil.

On Monday, when Bradford & Bingley was nationalised, an astonishing 11 per cent of all mortgage deals on offer in the market were scrapped in a single day.

The Evening Standard asked experts to describe how the mortgage landscape has changed in recent months and name the best deals currently available.

FIRST-TIME BUYER WITH 10% DEPOSIT

Best Deals

Fixed rates

* 6.14 % (with £999 fee) - two years - Britannia Building Society
* 6.19 % (with £1,499 fee, for 'professionals' only) - three years - Scottish Widows
* 6.29 % (with £999 fee) - three years - Bank of Ireland

Tracker

* 1.13 % over Bank of England base rate (with £1,999 fee) - initial pay rate 6.13 % - two-year term - Cheltenham & Gloucester

Ray Boulger, senior technical manager at independent mortgage brokers John Charcol, said: "First-time buyers used to be able to get 100 per cent, even 100 per cent plus, mortgages but they completely disappeared from the market in the space of a week in February. Now if you have less than a 10 per cent deposit, there are few affordable offers out there.

"Some mortgage providers, such as Scottish Widows, are now only offering 90 per cent loans to 'professionals', a term which only covers narrow range of professions such as doctors, lawyers and accountants."

Melanie Bien, director of independent mortgage broker Savills Private Finance, said: "There is far less choice than there used to be. Although property prices are falling, it is harder than ever for first-time buyers to get on the property ladder as few lenders are now offering loans above 90 per cent of a property's value.

"The market downturn means they are shunning those with little or no deposit who are most at risk of negative equity - where their home becomes worth less than their mortgage. It used to be possible to borrow up to 125 per cent of a property's value using Northern Rock's Together product but there are not even any lenders offering 100 per cent mortgages anymore.

"Very few lenders now allow buyers to borrow 95 per cent and those who do normally charge a high premium."

Although tracker mortgages may offer better value in the long run if interest rates drop as predicted, both experts say first-time buyers may wish to opt for a fixed rate deal, with guaranteed monthly mortgage payments that cannot increase, to give security and help with budgeting.

BUY-TO-LET

Best deals

Fixed rate

* 5.99 % (with 2% fee) - two-year term - available up to 70% loan-to-value (LTV) - Northern Rock
* 6.19 % (with 2% fee plus £99) - five-year term - available up to 75% LTV - Cheltenham & Gloucester
* 7.29 % (with 1.5% fee) - five-year term - available up to 85% LTV - Bristol & West

Tracker

* 1.29% over base rate (with 2% fee plus £99) - initial pay rate 6.29 % - life term - available up to 75 % LTV - Cheltenham & Gloucester

Mr Boulger said: "This week has seen the availability of these types of loan plummet with the nationalisation of Bradford & Bingley's mortgage book. With the reduced competition other lenders are raising the cost of their mortgages. A year ago some lenders offered loans up to 90 per cent of a property's value but now 85 per cent in the maximum available and most have made 75 or 80 per cent their cut off. "

Ms Bien said: "Lenders are now asking landlords to make sure the rent charged covers 125 or 130 per cent of the mortgage repayments, whereas they used to accept 100 per cent. Landlords are finding it harder to make the numbers add up.

"It has been a turbulent week for the sector. Bradford & Bingley's buy-to-let lender Mortgage Express is no longer open to new business. As MEX was the most competitive and innovative lender in this market, this is a blow. Other lenders have pulled their deals and re-priced higher this week in a bid to protect service levels as they have been inundated with landlords looking to remortgage."

SELF-EMPLOYED

Best deals

Fixed rate

* 6.99 % (with 1.5% fee) - three-year term - available up to 75% LTV - Bristol & West

Trackers

* 1.8% over base rate (with £1,199 fee) - initial pay rate 6.8% - life term - available up to 65% LTV - Godiva, subsidiary of the Coventry Building Society
* 2.24% over base rate (with £595 fee) - initial pay rate 7.24% - life term - available up to 75% LTV - Manchester Building Society

Mr Boulger said: "Lenders are looking far more closely at applications to check there is no overinflation of pay. Rates have always been higher for self-certs than other sectors

Ms Bien said: "Lenders will pay close attention to the sector you work in and judge how it is faring in the credit crunch. If you are in financial services, property or construction it will be more difficult to get financing as your profits are likely to diminish next year.

"Rates on self-certification loans tend to be higher. But self-employed people who have been trading for at least 18 months and have one year's accounts should qualify for a standard deal, without the need to go down the self-cert route. However, if you have a bad credit score the lender may want three years' accounts before they give you a standard deal."

REMORTGAGING - PROFESSIONAL FAMILY WITH £250k LOAN ON £600k PROPERTY

Best deals

Fixed rates

* 5.54% (with fee of £1,499) - two-year term - up to 70% LTV (max £250k) - Abbey
* 5.69% (with fee £1,094) - five-year term - up to 60% LTV (max £1m) - Cheltenham & Gloucester
* 5.74% (with fee of £2,094) - two-year term - up to 60% LTV (max £1m) - Cheltenham & Gloucester

Trackers

* 0.54% above base rate (with £1,999 fee) - initial payment 5.54% - two-year term - up to 60 % LTV (max £250k)
* 0.69% above base rate (with £1,894 fee) - initial payment 5.69% - two-year term - up to 60 % LTV (max £1m), PLUS extra 'drop lock' option
* 0.69% above base rate (with £995 fee) - initial payment 5.69% - life term - up to 60 %LTV (max £500k) PLUS extra 'drop lock' option

Mr Boulger said: "Families who have more than 50 per cent equity in their homes have the widest choice of loans with the cheapest rates. The difference is far starker than it used to be as lenders strongly favour less risky borrowers with more equity in their homes.

"'Drop lock' options, where you can switch to the best fixed-rate available at any time if interest rates rise, are increasingly being offered to safe borrowers."

Ms Bien said: "Many people coming up to remortgage in the next six months are fearful that rates will keep rising and they won't be able to afford the payments. It is worth thinking well in advance - you can reserve a rate for up to six months before you need it, depending on the lender and you are not obliged to take your reserved rate.

"If you have savings, you might consider using these to bring down your loan-to-value. Rates are higher than they were a year ago, even though we have had three base rate reductions since then."

CASE STUDY

Natasha Bartman, 24, a personal assistant living in Marylebone
Income - £27,000 pa
Debts - £90 per month towards her student loans so effective income considered is £25,920
Deposit - £35,000
Ideal home - £350,000 two-bed flat with a view to renting out a room for £750/800 per month.

Best 'part guarantor' deal

* 6.94% (with £799 fee) - three-year fixed rate - Bank of Ireland 1stStart mortgage up to 95% LTV, which parents can 'part-guarantor'.

Natasha is one of tens of thousands of young people across London whose salary is not high enough for them to borrow what they need to buy their first property, despite having a reasonable deposit and being willing to rent out a spare room to pay the mortgage.

Many are therefore turning to their parents for help guaranteeing their home loan. A few lenders - including the Bank of Ireland - will allow parents to guarantee only part of the loan - the difference between what their child needs to borrow and the amount they are allowed to with their salary alone. Most lenders still require parents to guarantee the entire loan, which many will find difficult if they themselves already have a large mortgage and are struggling with rising prices.

Mr Boulger said: "The 1st Start mortgage puts buying a property in the reach of some people with small deposits, who don't quite earn enough to qualify for the mortgage they need. Provided parents have a greater income than they need to service their own mortgage, they can help guarantor their child's through this product.

Parents should take legal advice before committing to this support as they are likely to be fully liable if their child defaults, even if they are only required to have the income necessary to cover part of the mortgage."

Ms Bien said: "Many first-time buyers are relying on their parents for assistance. If they can't help with the deposit, they may be able to act as guarantors where the lender takes their income into account when deciding how much you can borrow - this usually means you can get a bigger mortgage.

"When Natasha is earning enough to service the mortgage on her own, the parents can then be released from their obligation but not before then. It is possible, therefore, that they are committed to this for several years, which may affect their ability to gain further credit in the future."

* It is important to seek independent mortgage advice.

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