Hundreds more home loan deals have been pulled by banks and building societies since the end of last week while rates on new fixed mortgage deals are continuing to ratchet upwards, the latest data reveals.

The continuing turmoil in the mortgage market is also prompting record numbers of people to take out loans of more than 35 years in an attempt to make their monthly payments more affordable.

On Monday the average rate on a new two-year fixed mortgage stood at 5.72%, according to figures from the financial data provider Moneyfacts, compared with 5.26% at the start of May.

That difference means someone taking out such a deal now faces paying £648 more a year than someone who signed up to the equivalent just over a month ago, based on a typical £200,000 mortgage.

The extra payment soars to more than £3,600 a year when compared with someone who took out a typical two-year fix priced at just over 3% in May last year.

UK banks and building societies have been pulling swathes of mortgage deals from their books in the wake of a smaller-than-expected drop in the UK inflation rate to 8.7%, which led markets to bet that the Bank of England would raise interest rates well above 5% by the end of the year.

The number of residential mortgage deals available on 22 May – two days before the inflation data was released – stood at 5,385. That had fallen to 4,967 by Thursday last week and was down to 4,686 on Monday.

Meanwhile, rates on new fixed deals are showing no signs of ending their upwards march, dealing a blow to would-be homebuyers and those planning to switch to a new home loan product.

A standard mortgage used to run for 25 years, but experts are now reporting a growing trend for loans spread over longer terms as first-time buyers and others seek to make the soaring cost of loans more affordable.

A record 19% of all loans taken out by first-time buyers in March were for terms of 35 years or longer, with more than half taking a loan of more than 30 years, as house-hunters seek to make the soaring cost of loans more affordable.

This is the highest proportion since records began in 2005, UK Finance is expected to say in a report the trade body is publishing this week, and more than double the 9% rate in December 2021, when the Bank of England started raising interest rates from a low of 0.1%.

The data is also expected to show that 8% of home movers are taking out mortgages for terms of 35 years or more, compared with 4% in December 2021.

While the move to spread out the period of the loan makes it more affordable on a monthly basis for homeowners trying to cope with the cost of living crisis, over the lifetime of the mortgage they will pay significantly more interest and could be laden with debt into their retirement.

More than 100,000 households are due to come to the end of their fixed-rate deals this month, according to data from the Office for National Statistics. Its calculations suggested the number of fixed deals coming to an end in 2023 would peak in the second quarter of this year − 1 April to 30 June − at 371,000.

Homeowners are facing the stark choice of either choosing deals with hefty rates or being hit with soaring costs when they default to their existing lender’s standard variable rate.

Santander, the UK’s third-largest lender, took the rare action of making changes over the weekend, while TSB withdrew all of its 10-year fixed-rate deals on Friday with only a few hours’ notice. Lenders that are due to increase the cost of some of their deals on Tuesday include Coventry building society and LiveMore Capital.

Other lenders withdrawing some or all of their fixed-rate mortgage deals on Monday included Vida Homeloans and Suffolk building society.

The likes of Barclays, HSBC, NatWest, Virgin Money, Nationwide, Skipton and Yorkshire building society have all increased fixed-rate deals by up to 0.85 percentage points over the last week.

Bank of England figures published last week showed mortgage approvals fell from 51,500 in March to 48,700 in April, with overall mortgage approvals down 38% in the first four months of this year compared with the same period in 2022.