Mortgages: your options if you want to switch deals or are a first-time buyer

theguardian.com:

Rates on new mortgages are continuing to climb, leaving millions of people in the UK – from those looking to switch to a new deal to would-be first-time buyers – wondering about their options.

After last week’s 0.5 percentage point interest rate increase, many mortgage borrowers worried about rising costs are unsurprisingly seeking the shelter of a fixed rate – but the deals on sale now are significantly pricier than those on offer only a few months ago.

Everyone’s circumstances are different but here we look at some of the options and things to think about for different categories of borrower.

Several hundred thousand people fall into this category – maybe more than 1 million.

If your deal is not ending for 12 months, your options are more limited, but if it is ending in perhaps six or seven months there are things you can do now.

The bad news for those whose deal is ending soon and who will be wanting to take out a new fixed rate is that the price of these has shot up. The financial data provider Moneyfacts this week said that the average new five-year fixed-rate mortgage has risen to 4.08% – up from 2.64% in December last year. At the time of writing, the very cheapest five-year fixes were at about 3.1%. It’s a similar story with two-year fixes, with the current average at 3.95% and the cheapest at about 2.8%.

So should you get every last drop out of your current deal, on the basis that it is going to be cheaper than a new fixed deal that you would move on to? Or is there an argument for some people to quit and move to a new deal now, before prices go up even more, or get one lined up for a few months’ time?

When it comes to bailing out of a deal early, most fixed-rate products have early repayment charges (ERCs) during the