More than one million UK households could see their mortgage payments rise by over £3,000 a year if they fail to switch to a new deal, according to new data from Compare the Market.
The figures, sourced by Compare the Market from the Financial Conduct Authority, show that 1,095,905 people who took out two-year fixed mortgages in 2024 are coming to the end of their terms this year. These homeowners secured their deals with an average interest rate of 4.81%.
Monthly payments could jump from £1,149 to £1,432
If these borrowers simply roll onto their lender’s standard variable rate (SVR) once their fixed term ends, their monthly mortgage payments could rise from £1,149 to £1,432. That represents an increase of £283 per month, or more than £3,000 over the course of a year.
Laura Pomfret, personal finance expert at Compare the Market, said: “An extra £283 a month on your mortgage is a significant amount of money for most households. That’s more than £3,000 over the course of a year, so simply rolling onto a higher rate without considering your options could have a real impact on your budget.”
Experts urge homeowners to shop around before deals end
Pomfret added: “A mortgage is likely to be the biggest outgoing in any household, so it’s worth paying attention to and looking for great savings for your budget.” She explained that understanding what new repayments could be ahead of time allows homeowners to plan for any increase and consider where they might need to adjust their budget.
She also advised: “It makes sense to shop around well in advance of any fixed deal ending as these things can take time and you could lock in a good rate. Give yourself plenty of time before your deal ends to understand your options, work out what you can comfortably afford, and seek guidance if you need it.”
Pomfret further noted: “Look at what a new deal will actually cost you each month, alongside any product fees or other charges, and consider how that fits into your household finances.”
Comparing mortgages could secure a more competitive rate
Sajni Shah, money expert at Compare the Market, said: “More than one million homeowners are coming to the end of two-year fixed-rates this year, and many could face a significant increase in their monthly repayments if they simply roll onto their lender’s standard variable rate.”
Shah added: “The good news is that if you’re a homeowner coming up for renewal, you don’t have to accept your lender’s default rate. Taking the time to explore your options before your current deal ends could help you secure a more competitive mortgage and avoid paying more.”
She concluded: “Shopping around to compare mortgages from different lenders is one of the simplest ways to see what’s available and find a deal suited to your individual circumstances. Even if you ultimately decide to stay with your existing lender, comparing first could give you greater confidence that you’re getting the right mortgage for you.”
