The statistics, provided by LMS, estimated the number of loans rose month-on-month by 16% to 27,734 but compared to September last year, the number of transactions had fallen by 14% when there were 32,400 remortgage loans recorded.

The average remortgage loan now stands at £158,661 while market share for refinancing accounts for 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.”

September and October have seen lenders locked in a product and price war slashing rates and offering incentives to lure in customers.

HSBC entered the intermediary market at the start of the month with a 0.99% discounted variable rate while Accord launched a five-year fixed rate of 2.59%.

“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.”