Analysis from property services firm LMS revealed the increase took the number of remortgage transactions to 25,325 last month taking the value of remortgage lending to £4bn.

This was 9% higher than the value of lending in June.

Andy Knee, chief executive of LMS, said: “With two members of the Bank of England’s Monetary Policy Committee already staking a claim for an immediate base rate rise, an increase looms ever closer, having an impact on aspiring and existing homeowners.”

The average remortgage loan fell to £159,582, a 2% decrease compared to June but still 9% higher than July 2013.

Remortgages now account for 21% of the total mortgage market. This proportion remained the same month-on-month but represented a slightly smaller share of the market than June 2013, when remortgages held a 25% share of the market.

The average mortgage rate increased to 3.15% in June which analysis from the Council of Mortgage Lenders revealed was the fifth consecutive rise in average rates in six months.

But Knee said customers shouldn’t panic because any rise in the base rate was likely to be gradual which would give customers plenty of time to explore the best rates available to them.

Despite the July scramble to snap up a good deal, remortgage activity remained subdued compared to the same period in the previous year.

The number of remortgage transactions was 14% down year-on-year. The decline suggests stricter underwriting and affordability rules brought in by the Mortgage Market Review are making it tougher for homeowners to switch their mortgage.

“Affordability remains key to the property market,” said Knee.

“With the average amount of equity released through remortgaging falling by 4% from last month, it is apparent that more stringent rules and less competitive rates are taking their toll.”