Almost half a million households face paying hundreds of pounds more on their mortgage each month, as ultra-cheap fixes expire.
This year 469,192 homeowners are coming off five-year fixed rate mortgages locked in at a time when interest rates were almost zero – and it was entirely possibly to get a home loan below 1.5 per cent, and in some cases, sub-1 per cent.
Based on an average mortgage debt of £178,523, these homeowners will now see monthly payments jump £510 on the average standard variable rate, according to analysis by Compare the Market.
Borrowers coming off five-year fixes this year are coming off an average rate of 2.11 per cent, according to the comparison site.
For those that don’t line up to a new deal, they will be in danger of falling onto their lender’s standard variable rate (SVR).
This is the rate that people end up on once their fixed deal ends and they fail to switch to a new one.
Of the 7.1 million households currently on fixed rate deals, around 1.6 million need to switch to a new rate over the course of this year, according to UK Finance
The latest Bank of England figures show the average SVR was 7.13 per cent at the end of March 2025.
That would see the average borrower coming to the end of their five-year fix moving from paying £766 a month to £1,277 a month.
Luckily homeowners who shop around for a new mortgage deal can avoid this fate.
The average borrower can currently secure a five-year fixed rate mortgage of 4.33 per cent.
While the typical borrower will still see their monthly costs rise from £766 to £975, it represents a £301 monthly saving compared to lapsing onto an SVR – the equivalent of £3,618 over the course of a year.
‘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, 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.’
| 2025 Standard Variable Rate | 2025 Average SVR | 2025 two year fixed rate | 2025 five year fixed rate | |
|---|---|---|---|---|
| 2020 Five Year Fixed Rate | ||||
| Average interest rate | 2.11% | 7.13% | 4.60% | 4.33% |
| Monthly repayments | £766 | £1,277 | £1,002 | £975 |
| Annual repayments | £9,195 | £15,319 | £12,029 | £11,702 |
| Annual saving compared to SVR: | £6,124 | – | £3,290 | £3,618 |
| Monthly savings compared to SVR: | £510 | – | £274 | £301 |
| Monthly cost change compared to 2020: | – | £510 | £236 | £209 |
| Annual cost change compared to 2020 | – | £6,124 | £2,834 | £2,506 |
| Source: Compare the Market. Based on an average mortgage of £178,523 per household and 25-year term | ||||
Mortgage rates have been on a downward trajectory of late, leaving mortgage borrowers approaching the end of their current deal with a decision to make.
When rates are falling, the temptation can be to hold off and wait for cheaper home loan deals – especially for those remortgaging who don’t need to time their mortgage with a house move.
However, if waiting means slipping on to an expensive standard variable rate when their current fixed deal finishes, this could start to wipe out any potential savings from future interest rate cuts.
‘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,’ said David Hollingworth, associate director at the broker L&C Mortgages.
‘There could be temptation to wait in the hope of lower rates to come but that carries the risk of falling onto a sky high standard variable rate.
‘With uncertainty in the market, rates are constantly moving and some have edged back up, so it can be a confusing time for borrowers.
‘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.’