Lending stood at £4.1bn in January, as reported by the Council of Mortgage Lenders, however it fell to £3.5bn in February according to the LMS.
In terms of volume there were 23,135 remortgage loans in February, down 7% from the 24,900 recorded last year.
The average amount of equity withdrawn with a remortgage has almost doubled (94%) year-on-year to £26,862.
Andy Knee, chief executive of LMS, said: “Despite inflation reaching its lowest-ever level – falling to zero for the first-time on record – there has been a significant increase in the average amount of equity withdrawn through remortgaging.
“It is apparent, that despite the low inflation we’re experiencing, which should provide a boost to household spending power, many families continue to feel the pinch and remortgaging can provide a much needed source of income.
“It is therefore important that low inflation does not affect the wage growth we’ve finally started to experience in recent months since affordability continues to remain key.”