The Money and Credit report said the increase was driven by borrowing ahead of the tapering of the stamp duty holiday.
Net mortgage borrowing also reached a peak of £17.9bn, beating March’s previous record high of £11.5bn.
Gross repayments were also at a record level of £27.7bn.
Despite this, there was not a huge rise in the number of mortgage approvals, indicating a shortening of time between application and loan provision.
Approvals for house purchases, declined to 81,300 in June, from 86,900 in May. This was the lowest number of approvals since July last year but was still above levels seen before February 2020, before the pandemic began.
Remortgage approvals rose slightly from 34,800 in May to 35,400 in June.
BoE said this was low compared to pre-pandemic months.
The interest rate paid on new mortgages rose five basis points to 1.95 per cent in June. The rate on outstanding mortgages was unchanged at a low of 2.07 per cent.
A bouyant market
John Phillips, national operations director, Just Mortgages and Spicerhaart, said the housing market continued to show buoyancy.
He said: “Even with the slight dip in activity, it’s still a great time to be a broker. Although the market is cooling as the stamp duty holiday deadline has come and gone, we are still witnessing an incredibly active market.
“Borrowing reached a record high in June, which is unsurprising when we consider that house prices have experienced a surge this year. Even without the stamp duty holiday, there is still a wave of buyers looking to move and this will undoubtedly drive activity until at least the end of the year.”
Tempting deals
Richard Pike, sales and marketing director at Phoebus Software, said: “A dip in mortgage approvals in June could be the first sign that the market is settling back to some sort of normality after the frenetic action we’ve seen recently. Coupled with Nationwide’s reported fall in house prices you could be forgiven for thinking we are heading for another downturn.
“However, there is one factor that is likely to keep the market moving for both purchase and remortgaging, and that is mortgage interest rates and the current flurry of fixed-rate deals that are being announced on an almost daily basis.”
Pike added: “With high street banks and building societies reporting record mortgage growth this year, there is plenty of scope for these historically low-interest rates and we can expect to see more and more tempting deals.
“We are already seeing remortgage activity gaining momentum, as the supply of properties coming to market slows. As current fixed rates come to an end we may see the pendulum swing from record purchase levels back to a growing remortgage market.”
