Research by MoneySuperMarket suggest that prospective borrowers are changing their spending habits in a bid to pass the tighter lending criteria brought about by the Mortgage Market Review (MMR) one year ago.

The comparison site found that 20% of those looking to apply for a mortgage in the next three years are planning to use cash more frequently to hide exactly what they spend their money on from a prospective lender, while 21% will pay for more items on their credit card and then clear the balance at the end of each month so they can maintain a healthier balance in their current account.

Borrowers also plan to rein in their monthly spend by an average of £159 by cutting back on non-essential items, while 29% intend to pay off all debts in the lead up to their mortgage application. However, 8% had never even heard of the MMR rules.

Kevin Mountford, head of banking at MoneySuperMarket, said: “Since the new mortgage lending rules came into play a year ago, those looking to remortgage, existing borrowers who are moving home and looking for a new deal and first time buyers will have been subject to their lender looking more closely – almost forensically – at their monthly outgoings. While the rules were introduced for the right reasons, in some cases borrowers who can easily afford a mortgage are being turned down for arbitrary reasons, despite them being able to easily afford mortgage repayments. While we wouldn’t want to see the ease of approval going back to the pre-credit crunch levels, it is clear than some consumers have changed their spending habits in order to pass the tests, so may be trying to paint a picture that is far from the reality just to satisfy the requirements.

“Paying off debts is always a good way to start when it comes to applying for a mortgage as existing borrowing will be taken into account by a lender when it comes to your application. Reducing the amount you spend each month could also help when it comes to the amount a lender thinks you can afford to borrow. But those trying to ‘play’ the system should exercise caution as lenders may still require you to prove where your cash goes. Using a credit card to hide your spending may also count against you as lenders have access to your credit report, so will be able to see a real-time snapshot of your credit card balance at any time within the month.

“Research and shopping around for the best deal is an essential first step when applying for any mortgage And don’t forget, you need to look beyond the rate of interest to the fee as well, as this can significantly impact the total cost of the mortgage over the term of the deal.”