Only 15% of people remortgaging were withdrawing equity, according to new data from realpricecomparison.com.
Around 85% of all remortgage applications through the service between June and August were customers switching deals to better rates.
Only 4% of borrowers were able to withdraw equity to help consolidate debts while 3.5% raised money for home improvements and another 2.5% raised capital. Another 4.3% raised money to buy another property while the rest raised cash for their business.
Mortgage equity withdrawal which was running at £6.7 billion a quarter at the start of 2008 has now gone into reverse as borrowers put money back into their homes. Recent Bank of England figures show a record £8.1 billion was put into housing equity in the first three months of the year.
Realpricecomparison.com says lenders are currently unlikely to consider remortgaging applications which are for debt consolidation as they are worried about customers running up debt problems.
Francis Ghiloni, commercial director at realpricecomparison.com, said: “Neither lenders nor borrowers are willing to take risks in the current market. Inevitably that means fewer applicants are even trying to withdraw equity.