Mortgage borrowing grew to its strongest level in seven years in October as consumers rushed to snap up cheap deals, banks have reported.
The British Bankers' Association (BBA) said gross mortgage borrowing reached £12.9 billion last month - marking a 26% increase on the same period a year ago and the highest figure since August 2008.
Some 45,437 mortgages were approved for house purchase in October with a total value of £8.1 billion, representing a 21% increase compared with October last year.
There were 24,275 approvals for remortgaging, collectively worth £4.2 billion, marking a 34% jump on October last year.
Richard Woolhouse, chief economist at the BBA, said: "Mortgage rates are at multi-year lows and people are snapping up the very competitive deals being offered by banks."
Mark Harris, chief executive of mortgage broker SPF Private Clients, said lenders are particularly keen to offer cheap deals at the moment to meet their end-of-year targets.
But he said that for many borrowers, stricter lending rules which have come into force in recent years are still a barrier to them getting a mortgage.
Mr Harris said: "Mortgage approvals are rising but far from racing away while growth is more moderate and therefore more sustainable than in the past."
The BBA's report said that over the past year, net borrowing using personal loans has been rising at an annual rate of around 5%.
The report said: "Increased demand for personal loans continues to reflect better credit availability, lower interest rates on personal loans and stronger household finances."
The figures also showed that net borrowing by non-financial businesses increased by £637 million in October.
The BBA said that bank lending to companies is "polarised", with growth in lending to wholesale, retail and manufacturing sectors, while lending to the construction and real estate sectors is continuing to shrink.
Charlotte Nelson, spokeswoman for financial information website Moneyfacts, said the average two-year fixed mortgage rate has fallen to 2.67%, the lowest on the website's records.
The average five-year fixed rate has also fallen significantly, from 3.96% a year ago to 3.29%, she said.
Ms Nelson said: "Borrowers are clearly taking advantage of these low rates to secure lower monthly repayments."
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