Despite the three-month sterling London interbank offered rate (Libor) dropping to a new low, lending conditions remain obstinately tight, the Times reports.Yesterday's drop in the Libor had little effect on overdraft rates, while the average cost of a five-year mortgage moved towards the six per cent mark.Michelle Slade, a spokesperson for consumer advice site Moneyfacts.co.uk, commented: "Normal rules where lenders pass or decrease rates based on the cost of funding seem to have well and truly gone out of the window."She added that regular lenders are continuing to be penalised for mistakes made by lenders prior to the financial crisis.The latest figures from the British Bankers Association also showed that net lending to homeowners increased by the smallest margin witnessed in nine years in July.Unsecured lending was also weak during the month, while the sustained rise in deposits indicated that Britons are still keen to clear up their finances during this period of economic uncertainty.