However, remortgaging both by value fell to £3.87bn, down from £3.9bn reported by the Council of Mortgage Lenders (CML) in July.
Conveyancer LMS estimated that the number of remortgage loans also fell by 1% to 24,863 in August, down from 27,100 in July.
Tighter regulations have dissuaded homeowners from remortgaging over the last year, said LMS.
The average remortgage loan has fallen to £155,589 – a 3% decrease from last month but this is 4% higher than the average loan of £149,367 in August 2013.
Wage inflation for the second month running brings annual remortgage payments as a percentage of income to their lowest since start of the year.
According to CML data, the average mortgage interest rate increased to 3.2% in July, but the average monthly household income for all new mortgages also rose by 4.9% to an average income of £46,145.
LMS calculations show that annual remortgage repayments account for just over a fifth (20.3%) of household income – the lowest ratio since January this year.
Homebuyers are stretching further to meet repayments worth 22.2% of income. This is the biggest difference between purchase and remortgage borrowers for a year.
Andy Knee, chief executive of LMS said: “The hangover from MMR accounts for lower remortgage volumes, as those who could remortgage for a better rate or to reduce monthly payments are put off by the time-consuming and intrusive checking process.
“However, as the process is fine-tuned, affordability will come down, lender appetite will return and the arrival of highly competitive rates towards the end of the year will encourage more remortgage activity, to offer excellent long-term fix opportunities.
He concluded: “Even with an interest rate rise anticipated for the Spring of next year, Carney’s insistence that it will be slow and gradual means that competitive rates will persist, and customers will keep their affordability intact – something critical to all those that have found their purse-strings stretched over the past few years.”
