Nearly half a million homeowners who took out mortgages in 2020 are facing a surge to their monthly payments as they come off cheap long-term fixed rates, new data shows.

This year 469,192 homeowners coming off five-year fixed deals had an average interest rate of 2.11 per cent, figures from Compare the Market show, whilst mortgage rates are now much higher.

Some will have been on even cheaper rates of as little as 1 per cent.

Any of these homeowners who move onto their current lender’s standard variable rate (SVR) – which happens automatically unless a new fixed deal is secured – could see their monthly payments jump by thousands of pounds.

Based on an average mortgage debt of £178,523, homeowners will see a monthly jump of £510 – from £766 to £1,277.

This is equivalent to paying £15,319 annually compared to £9,195 on their previous five-year fixed deal.

Others with higher mortgage debt and lower interest rates are likely to face even bigger bills.

Rates have increased significantly over the years on the back of higher interest rates with the latest Bank of England figures showing the average SVR was 7.13 per cent at the end of March 2025.

But there are savings to be made. Switching from the current average SVR to a new five-year fixed rate mortgage with an average rate of 4.33 per cent could result in up to £3,618 in savings per year.

Similarly, switching from the current average SVR rate to the average two-year fixed rate of 4.6 per cent could save homeowners up to £3,290 annually on their mortgage repayments compared to the average SVR.

Others could get even cheaper rates as they have started to fall again in recent times with several lenders offering rates just below 4 per cent, although this is still more than paid by many in previous times.

Interest rates are expected to fall later this year from their current level of 4.25 per cent, which in turn, it is hoped will bring down mortgage rates although it is not guaranteed.

How far the base rate falls will also be affected by inflation, which is currently at 3.5 per cent, and other economic global events.

David Hollingworth, associate director at the broker L&C Mortgages, said: “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.

“While this will ease some of the pain, hundreds of thousands will still be steeling themselves for a steep hike in their rate as their fix ends.”

Some may be tempted to wait to fix in the hope of lower rates to come but that carries the risk of falling onto a high SVR.

Hollingworth added: “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.”

Compare the Market’s analysis is based on a Freedom of Information request to the Financial Conduct Authority and data from the Bank of England.