BANKS cut their rates and relaxed their criteria last week despite warnings that the shortage in home-loan finance will persist until 2010, writes Ali Hussain. Sir James Crosby’s interim report on mortgage funding, published last week, warned the credit crunch would continue to “take its toll” on lending for at least the next two years. However, as Crosby unveiled the report, Abbey increased its “jumbo” loans range with the introduction of two products that offer up to £5m. The minimum loan size is £550,000 and the products come as either a three-year fixed-rate deal at 6.79% or a three-year tracker at 6.34%. Previously, the bank would only lend up to £550,000 on a three-year fix. It is also slashing rates on its two and three-year fixed and tracker deals by as much as 0.15%.