Half a million households to see mortgage payments rise as cheap rates end ...Middle East

This year 469,192 homeowners coming off five-year fixed deals had an average interest rate of 2.11 per cent, figures from Compare the Market show, whilst mortgage rates are now much higher.

Any of these homeowners who move onto their current lender’s standard variable rate (SVR) – which happens automatically unless a new fixed deal is secured – could see their monthly payments jump by thousands of pounds.

This is equivalent to paying £15,319 annually compared to £9,195 on their previous five-year fixed deal.

Rates have increased significantly over the years on the back of higher interest rates with the latest Bank of England figures showing the average SVR was 7.13 per cent at the end of March 2025.

Similarly, switching from the current average SVR rate to the average two-year fixed rate of 4.6 per cent could save homeowners up to £3,290 annually on their mortgage repayments compared to the average SVR.

Interest rates are expected to fall later this year from their current level of 4.25 per cent, which in turn, it is hoped will bring down mortgage rates although it is not guaranteed.

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David Hollingworth, associate director at the broker L&C Mortgages, said: “Although many homeowners have had to deal with the payment shock of their ultra-low fixed deal ending, fixed rates have improved recently as the rate outlook has improved.

Some may be tempted to wait to fix in the hope of lower rates to come but that carries the risk of falling onto a high SVR.

“Seeking advice in good time, will allow homeowners to secure a deal, protecting against any turnaround in pricing but still having the chance to review before the switch and take advantage of lower rates, if there is further improvement.”

Compare the Market’s analysis is based on a Freedom of Information request to the Financial Conduct Authority and data from the Bank of England.

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