Comparatively remortgage lending totalled £3.7bn in August according to the Council of Mortgage Lenders.
The number of loans increased by 16% from August to 27,734 in September, yet there were still 14% fewer remortgage loans than in the same month last year, when 32,400 were recorded.
The remortgage market share now equates to 25% of the market, 5% higher than last month but down from 29% in September last year.
Andy Knee, chief executive of LMS, said: “This month’s figures demonstrate that many customers are seeking to take advantage of the competitive rates on offer at present.
“Tighter lending criteria and the introduction of MMR took their toll in the earlier part of the year but the market has recovered well to record the largest lending value seen in the last 12 months.
“There are some excellent offers for customers willing to shop around, and the opportunities for remortgaging in particular are boundless – with the biggest difference in rates between remortgaging and new purchase mortgages that we’ve seen for two years – offering homeowners some welcome relief.
“As affordability remains critical to so many home owners, especially when an interest rate rise occurs, it would be foolish not to examine the options that may be available.”
Thanks to 0.5% wage growth in August remortgage repayments now account for less than a fifth (19.7%) of household income, less than for new home purchases (22.1%)
The average remortgage loan has risen to £158,661 – a 2% increase from last month and 5% higher than the average loan of £151,428 in September 2013.
Remortgage interest rates increased to 3.21% in August according to CML data, the highest rate since June 2013.
Knee added: “Continued house price growth over recent months has come to the rescue of many households, bringing them out of negative equity and easing restrictions, providing many with the opportunity to remortage for a better rate.
“People are therefore advised not to be complacent, but to examine their options now as uncertainty ahead of the election next year, the prospect of an interest rate rise and changing economic conditions may introduce a note of caution to the market, curtailing lender appetites.”
