In today's mortgage market, mortgage borrowers are facing a torrid time, with lenders removing mortgage products every day, changing rates and becoming much more cautious with their lending. Although the rates have come down there has been a significant drop in applications and lending on mortgages.

John Porter from The Debt Counsellors www.debtcounsellors.co.uk said today. "Many people are facing a real challenge of gaining a mortgage that's right for them. The only people who really benefit from the rate lowering are the people on tracker rates. Although it can help with affordability, the overall savings are fairly small. On a £125,000 mortgage, which is the average in the UK, the saving in interest is about £26 per month. The real issue is the amount of lending going on, and how tough it is now to get a mortgage".

As lending across the board is down, gross lending declined to an estimated £24 billion in February, down 7% from £25.9 billion in January and 6% from £25.6 billion February 2007, according to the Council of Mortgage Lenders.

With this trend set to continue this will place a strain on banks when lending money. They have all got to be seen a being cautious when lending, as the share holders will want to know that there is no chance of another Northern Rock and potentially lose their money. The banks also want to keep what money they have in case of another credit crunch. They need the money to lender to their own customers. For this reason they are being over cautious and therefore people are really struggling to get a mortgage.

John also said, "the market is the worse I've known it for 20 years. Even 10 years ago when we had the recession it wasn't so bad. That's because previous to this lenders had been cautious like they are now, so there was not so many high risk cases, if any. But now lots more people have high risk mortgages, and therefore many more people are defaulting causing real issues of possible repossession and this makes that bank look bad, and in most cases lose money".

Because of these reasons lenders are just not lending. People are struggling if they have gone to higher rate mortgages, First time buyer and landlords are not buying, so the new money is not coming into the market, and this is keeping the money tied up within the few banks that have their own funds.

Even with a reduction in Interest rates, it appears that even The Bank of England cannot paper over the ever widening cracks appearing on the economy.

To find out more about how The Debt Counsellors can help reduce your debt burden and how to become debt free in 36-60 months, please call: 0800 018 6018 or visit www.debtcounsellors.co.uk.