As many as one-in-five mortgage borrowers said they will use cash more frequently before applying for a loan so banks cannot see what they are spending money on.

A quarter of those surveyed said they cut back on spending in a bid to seem sensible with money.

One-in-five (21%) also spend more on credit cards and pay off the balance each month, maintaining a bigger current account balance.

Stricter rules for borrowers were introduced under the Mortgage Market Review last year but 8% of borrowers said they were unaware of any changes.

However, almost a third (29%) of borrowers said they wanted to pay off all their outstanding debts in the lead-up to a mortgage application anyway.

Kevin Mountford, head of banking at Money Supermarket, said: “Since the new mortgage lending rules came into play a year ago, those looking to remortgage, existing borrowers who are moving home and looking for a new deal and first time buyers will have been subject to their lender looking more closely – almost forensically – at their monthly outgoings.

“While the rules were introduced for the right reasons, in some cases borrowers who can easily afford a mortgage are being turned down for arbitrary reasons, despite them being able to easily afford mortgage repayments.

“While we wouldn’t want to see the ease of approval going back to the pre-credit crunch levels, it is clear than some consumers have changed their spending habits in order to pass the tests, so may be trying to paint a picture that is far from the reality just to satisfy the requirements.”