There is speculation that the Bank of England will increase the cost of borrowing next month. The result of this is a surge in homeowners taking advantage of low mortgage rates. According to figures from UK Finance, re-mortgage deals increased by 11.3% in February and new loans were valued at £6 billion.

Craig McKinlay, sales and marketing director at lender Kensington Mortgages, said: "Prudent borrowers are now locking themselves into competitive mortgage deals that remain on offer through the mortgage market."

The speculated rate rise is due to official data that showed average earnings rose from 2.6% to 2.8% in the three months leading up to February. It is expected that the Bank of England's Monetary Policy Committee will order a rate rise in May from 0.5 to 0.75%. Rates have been at 0.5% or below since March 2009 and average earnings have increased at the fastest rate for two and a half years. Wages are out-stripping inflation for the first time in a year.

Jackie Bennett, director of Mortgages at UK Finance, said: "Remortgages are up year on year as homeowners look to fix costs." Mortgage rates are starting to drift up, with the average two-year fix at 2.43 per cent, up from 2.32 per cent a year ago.