People looking to re-mortgage their home borrowed more money in September than they did last month, it has been revealed.

According to new figures compiled by the Council of Mortgage Lenders (CML), Brits obtained loans of £11.1 billion to re-mortgage compared to the £11 billion borrowed in August and £10 billion borrowed in September 2006.

Householders also saw the cost of taking out a mortgage increase as the impact of interest rate rises in May and July continued to bite, with the average mortgage rate on offer up from 5.91 per cent in August to 6.02 per cent in September.

However, the CML warned that the figures did not reflect the impact of the Northern Rock crisis which began in the middle of September.

Michael Coogan, the organisation''s director general, said: "The data shows that higher interest rates are now beginning to slow the housing market.

"We expect re-mortgaging to continue to hold up as borrowers coming off fixed rate deals look to re-finance," he predicted, adding that customers may "see an increase in costs" in the months to come.

Yesterday, figures from the Office for National Statistics revealed that factory gate inflation – which measures the rise in prices of goods produced by manufacturers – had risen, leading some analysts to speculate that an interest rate cut may be still some way off.