Lenders are being more selective about their housing finance commitments, with the result that increasing numbers of borrowers are unable to refinance. Average loan life has increased from under four years to more than five years since the middle of the last decade.These are among the findings of the latest JP Morgan mortgage industry survey, which was released yesterday.The principal of Digital Finance Analysis, Martin North, said many people were being locked out of the mortgage market because they have insufficient income under new tougher serviceability tests.North said the introduction of a suitability test as part of the National Consumer Credit Protection Act had made lenders look more closely at a borrower's capacity to service a loan, with the result that more people are being knocked back.Another factor is that the fall in house prices over the past couple of years has left many borrowers with higher loan-to-valuation ratios than when they took out their loans. Lenders are not keen to refinance borrowers in this position.According to the report, 12.5 per cent of home buyers who have entered the market since 2008 are in negative equity, compared with 2.9 per cent of those who borrowed before 2008.JP Morgan banking analyst Scott Manning said lenders were looking to increase the margins in their mortgage businesses by cutting back on discounts. He estimates that discount rates have been cut back by about 10 basis points this year.All these factors are contributing to the slow rate of growth in home lending. Manning said he expected the same conditions to apply throughout next year and 2014.Non-bank lenders have been unable to step in and offer loans to higher-risk borrowers, as they might have done in the past, because their funding constraints do not allow them to compete on loan pricing or sell significant volumes of low-doc or non-prime loans.JP Morgan estimates that low-doc loans now account for two per cent of the mortgage market, compared with 10 per cent before the financial crisis.