The figures reflected the ongoing trend throughout the year of product transfers becoming significantly more common at the expense of remortgaging.
Overall the total number of product transfers carried out in 2020 fell by only three per cent from 1,203,600 to 1,171,500. This represented £168.3bn of mortgage borrowing being refinanced internally.
In contrast remortgaging activity for the year fell by 21 per cent from 446,430 to 351,770.
The proportion of refinancing conducted by product transfer soared during 2020 with a peak in August approaching 85 per cent of all refinanced deals done by product transfer.
Prior to last year, product transfers typically made up around 70 to 75 per cent of all mortgage refinancing.
In Q4, 280,900 product transfers took place, a decrease of 10 per cent compared to the same period in 2019.
Meanwhile, remortgage transactions reached 70,120 in the quarter. Compared to Q4 2019, remortgaging activity was down by 37 per cent from 111,830 deals.
Some 38,000 borrowers withdrew equity while remortgaging and 32,120 stuck to a straight rate swap.
UK Finance said the popularity of releasing cash when remortgaging was driven by demand for second home deposits, new buy-to-let properties and to gift deposits to children to help them get on the housing ladder.
“The popularity of product transfers generally has had a further impact on gross lending, in addition to the contraction in house purchase seen in 2020, as product transfers do not feature in gross lending totals,” it added.