Those rolling onto SVR face increased costs of more than £3,000 a year

More than a million homeowners who took out mortgages in 2024 face a £283 hike in monthly payments or more than £3,000 a year as they move onto their lender’s SVR, according to a Freedom of Information request by Compare the Market from the FCA.

It used an analysis of the average two-year fixed rate and average SVR on an average mortgage debt of £200,250 to judge the impact on 1,095,905 homeowners as they come off two-year fixed-rate mortgages with an average interest rate of 4.81%.

A significant saving

It found that switching from the SVR to a new two-year fix could reduce monthly repayments for these homeowners by up to £286 per month and £3,432 a year. The latest figures from Moneyfacts show the average SVR is now 7.13% while Bank of England figures show the average two-year fix in July was 4.79%.

The figures include 122,526 first-time buyers, 111,349 home movers or second-time buyers, as well as 690,738 homeowners who previously remortgaged with their current provider and 122,832 who remortgaged with a new provider.

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.

“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 individual circumstances.”