Moneyfacts.co.uk says the margin between mortgage rates and the cost of funding to lenders via swap rate markets is at an all-time high.
Two years ago the margin on a two-year fixed deal was 1.28%, compared with 3.29% today.
Michelle Slade, spokeswoman for Moneyfacts, says borrowers will be angry at this news, especially at the government-backed banks.
She says: “Mortgage rates are falling, but only a fraction of the reduced funding cost is being passed on as lenders continue to repair their balance sheets.”
Meanwhile, the Bank of England’s latest Trends in Lending Report shows the flow of net mortgage lending by residential lenders was £0.7bn in June, compared with £0.8bn in May.
Remortgage activity continued to be weak in July.