The Welsh society said the uplift in advances has increased the value of its mortgage book to more than £5bn for the first time in the society’s 155-year history.
First-time buyer mortgages accounted for 1,100 of advances made in the first six months of the year.
Arrears levels remained low with the percentage of cases with arrears greater than 2.5% of the total mortgage balance currently standing at 0.53%, compared to 0.74% as at 31 December 2014.
Savings deposits were used to fund 87% of Principality’s mortgages.
Graeme Yorston, group chief executive of Principality Building Society, said: “Our lending programme continues to be funded by our savers and while we may have to take advantage of some of the wholesale funding opportunities that exist in the market to remain competitive, we do not envisage our model changing substantially.”