Approximately 1,095,905 homeowners in the UK are nearing the end of their two-year fixed-rate mortgages, taken out in 2024, and face a substantial increase in their monthly payments. Data from Compare the Market indicates that these homeowners, who had an average interest rate of 4.81%, could see their monthly repayments rise by an average of £283 if they transition to their lender's standard variable rate (SVR). This projected increase is based on an average mortgage debt of £200,250.
These affected homeowners include 122,526 first-time buyers and 111,349 home movers. The figures also encompass 690,738 individuals who previously remortgaged with their existing provider and 122,832 who switched to a new lender. Should these homeowners not secure a new deal, their monthly payments could rise to £1,432 on an SVR, an annual increase of over £3,000 compared to their current fixed rate payments.
Despite mortgage rates generally falling since 2024 in line with the base rate, homeowners coming off these deals are still likely to face higher costs. However, switching to a new two-year fixed-rate deal could offer relief, potentially reducing monthly repayments by up to £286, or £3,432 annually, according to Compare the Market's findings.
Official figures show the average SVR currently stands at 7.13%, while the average two-year fixed rate in July was 4.79%. Unlike fixed-rate mortgages, SVRs are determined by individual lenders and are typically higher than most available fixed-rate options. Borrowers are generally permitted to remortgage before their current deal expires.
Laura Pomfret of Compare the Market emphasized the financial impact, stating, "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."
She advised homeowners to view the end of a fixed mortgage deal as an opportunity to review their overall financial situation. "Understanding what your new repayments could be ahead of time means you can plan for any increase and consider where you might need to adjust your budget," Pomfret added. She also cautioned against focusing solely on interest rates, recommending a look at the total monthly cost, including product fees and other charges, to ensure it aligns with household finances.
In a related development, separate data from Zoopla indicates that prospective buyers need to increase their deposit amounts significantly to offset higher mortgage rates. Buyers now require an average of £18,200 more for a deposit to maintain the same monthly repayments as they would have in January 2026. This change means a buyer who could previously afford a £200,000 mortgage would now only be able to borrow approximately £182,000 for the same monthly payment. The required deposit increase varies regionally, with London buyers needing an additional £35,500, while those in the North East might only need an extra £10,200.