Remortgage activity increased in July but house purchase lending slowed, Bank of England figures show.
There was £7.3bn of remortgaging, up from £6.6bn in June, but house purchase lending fell to £12.6bn from £13.7bn.
Alastair McKee, managing director of the independent mortgage broker, One 77 Mortgages, said: “There’s life in the old dog yet as canny homeowners continue to lock in cheap deals while they can before the spectre of interest rate rises looms.
“What is encouraging is that new mortgage approvals are not tailing off but putting in a surprisingly upbeat performance in the face of some pretty intimidating headwinds.
“Don’t forget that annual UK house market growth has more than halved in a year, transaction levels have been dropping, business investment is down and retail sales growth slowed at the fastest pace in over a year last month.
“Borrowers don’t seem to be paying any of that much attention and first-time buyers could be driving a lot of this traction. They won’t want to miss the party and will be keen to take advantage of low rates themselves.”
Overall lending fell to £20.9bn in July from £21.5bn in June.
Jonathan Samuels, chief executive of Octane Capital, said: “It’s by no means firing on all cylinders but equally the property market has not fallen flat on its face.
“Transaction levels are down and the market has without doubt cooled, but there is still demand.
“A combination of ultra-competitive mortgage rates and high employment levels is injecting a degree of fluidity into the property market. It’s keeping it alive.
“Rising inflation has the potential to weaken demand, as people increasingly feel the pinch, and the economy is hardly on a firm economic footing given the uncertainty surrounding Brexit.”
He added: “To protect themselves against rising living costs, and the threat of interest rate hikes, many households are clearly choosing to remortgage.
“With mortgage rates as low as they are, it’s no surprise.
“You suspect the property market will continue in much the same vein for the rest of the year. Steady rather than scintillating.”
Andy Knee, chief executive of LMS, has noticed the strong remortgage activity first hand.
He said: “We are already witnessing people remortgage onto longer term deals for added certainty and financial security and we expect this trend to continue as long as the macroeconomic climate grows ever more precarious.”