Monthly repayments could rise by over £500 for those reverting to SVR
Almost 470,000 UK homeowners who secured five-year fixed rate mortgages in 2020 are now facing significantly higher monthly repayments as their deals expire, according to research from Compare the Market.
Borrowers who revert to their lender’s standard variable rate (SVR) could see average monthly payments climb to £1,227 — a jump of £510 — based on an average outstanding mortgage of £178,523. That equates to an annual increase from £9,195 to £15,319.
The spike in repayments follows a sharp rise in mortgage rates since 2020, when the average five-year fixed rate was 2.11%. The most recent figures from the Bank of England show the average SVR had climbed to 7.13% by the end of March 2025.
Compare the Market’s analysis suggests that switching to a new fixed rate mortgage could help mitigate the cost. Homeowners opting for a new five-year fixed rate at the current average of 4.33% could save up to £3,618 per year compared to staying on the SVR. Choosing a two-year fixed deal at the average rate of 4.60% could reduce costs by up to £3,290 annually.
Although mortgage rates have eased following the Bank of England’s base rate cut earlier this month, repayments for many will still be higher than what they secured five years ago. A new five-year fix could mean paying an extra £209 per month, while a two-year fix could lead to a £236 increase, depending on the product and personal financial circumstances.
Potential strategies to reduce costs include extending the mortgage term, making lump sum payments, or switching to an interest-only arrangement, depending on eligibility and lender terms.
“Our research shows that around half a million homeowners locked in a five-year fix rate in 2020 when rates were low during the pandemic,” said Guy Anker (pictured), mortgage expert at Compare the Market. “Securing these deals may have saved households a significant amount of money over the past five years. However, as they reach the end of their fixed rate, these households may now face a substantial jump in mortgage costs.
“For any homeowners coming off a fixed rate mortgage this calendar year, it’s worth shopping around online soon and seeing what other deals are available, as this could potentially save thousands in annual repayments compared to going onto an SVR. You can sometimes book in a new rate up to six months before it’s due to start, and even if your deal expires towards the end of the year, it’s worth understanding the market now so you’ve all the info to hand when it’s time to act.
“While you can compare online, it’s also a good idea for homeowners to speak to a professional mortgage adviser to be as informed and confident as possible in their financial decisions if they don’t understand what can be a complex market. Even as someone who knows the market, I would use a broker, as they can have access to deals or crucial lending criteria not available to the general public.”
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