You think that with the amount of money us taxpayers have given to certain banks, they would be a bit more generous…

..instead the cheeky beggars are charging us some of the highest rates on the market!

Yes, just as the the total number of mortgages available sinks to the lowest on record, the high street banks are taking us for a ride. Let’s look at some examples:

Lloyds Banking Group (£11.5 billion of taxpayer cash) is making you pay a staggering 7.89% rate on a 5 year fixed-rate mortgage. The deal is available to those of you with a 10% deposit, with a fee of £99.

In addition, the Royal Bank of Scotland (£27 billion of taxpayer cash) is charging you 7.25% for a similar deal.

Compare the above deals with those from banks and building societies that have never been forced to go begging to the taxpayer!

Abbey, is charging 7.09% for a 5 year fixed rate at 90% LTV. Although it comes with a higher fee, this is over £3,000 cheaper than the Lloyds offer.

In addition, Britannia Building Society (which is merging with Co-operative bank) has 7.09% interest but on a 10 year fixed rate mortgage.

Mortgage advisers say that the high rates are evidence that mortgage lenders don’t want to lend and it seems to fly in the face of the Government’s plan to revive the ailing mortgage market.

Read: Would you pay the penalty for a better remortgage?

• Lack of available mortgages!

All this comes amid news that the number of different mortgages available to those of us buying or remortgaging has shrunk to less than a tenth of the level it reached when the housing market peaked back in 2007. 

There are now just 2,282 mortgages from which you can choose; that’s less than half the number of products available a year ago and more than 90% below the 27,962 available in July 2007.

If you are a first time buyer you have only 1,195 mortgages to choose from now; down from 17,756 in July 2007.

Ray Boulger, of John Charcol, the mortgage broker, said:

"When the Government pumped billions of pounds into these part-nationalised lenders last year they agreed to boost mortgage lending, but that is not happening.

“Most lenders are struggling to find the funding to offer more competitive mortgages, either from deposits or from the wholesale markets."

Louise Cuming, head of mortgages at moneysupermarket.com, said the lack of loan options for us would-be homebuyers was an "ongoing problem" hindering a sustainable recovery in the housing market. She said:

"Until this changes, and more mortgages become available, house price growth will remain muted at best with further falls possible, and many borrowers will struggle to get a mortgage.

"Lenders are competing to attract the same borrowers – those that are seen to offer the least risk to the bank – and there is no sign of this trend changing."

She added that the number of products was unlikely to increase in the short term.

• Why the drop in mortgage products? 

While the mainstream mortgage lenders are offering far smaller ranges of products, a large part of the drop in numbers was down to the withdrawal of specialist mortgage lenders from the market, such as those concentrating on self-certification and sub-prime mortgages.

This point is reinforced by the FSA’s managing director of retail markets, John Pain, who said the market for specialist mortgages had "reduced to almost non-existence" and that it needed to be examined closely. He said:

"90% of these mortgage customers have had access to the mortgage market and are still sustaining their mortgage accounts so we have to think very carefully about just eliminating this part of the mortgage market, otherwise you will close off opportunity for consumers."

• Fixed rates still on the rise

As we have mentioned elsewhere on this blog, interest rates on fixed rate mortgages continue to climb despite the fact that the Bank of England base rate has stayed at 0.5% .

The margin that mortgage lenders make on two-year fixes is now more than three-times higher than the same time a year ago.  Similarly, the average 5 year fixed rate is now 6.08%; up by 0.5% since June, while wholesale funding costs have fallen from 3.76% to 3.58%.

Royal Bank of Scotland said that if you are a first-time buyer, they can offer you a five-year fixed-rate mortgage at 5.99%, available up to 90% LTV. 

So, should taxpayer funded mortgage lenders be more generous towards us in their rates?

After all, it’s our money that has gotten them out of the mess they were in!

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