diff --git a/.changeset/small-oranges-give.md b/.changeset/small-oranges-give.md
new file mode 100644
index 000000000..c464c0a95
--- /dev/null
+++ b/.changeset/small-oranges-give.md
@@ -0,0 +1,5 @@
+---
+'@sveltejs/vite-plugin-svelte': patch
+---
+
+show correct error overlay for compiler errors during hot update
diff --git a/packages/vite-plugin-svelte/src/handle-hot-update.ts b/packages/vite-plugin-svelte/src/handle-hot-update.ts
index 6f3b90ff2..650378045 100644
--- a/packages/vite-plugin-svelte/src/handle-hot-update.ts
+++ b/packages/vite-plugin-svelte/src/handle-hot-update.ts
@@ -4,6 +4,7 @@ import { log, logCompilerWarnings } from './utils/log';
 import { SvelteRequest } from './utils/id';
 import { VitePluginSvelteCache } from './utils/vite-plugin-svelte-cache';
 import { ResolvedOptions } from './utils/options';
+import { toRollupError } from './utils/error';
 
 /**
  * Vite-specific HMR handling
@@ -32,7 +33,7 @@ export async function handleHotUpdate(
 		cache.update(compileData);
 	} catch (e) {
 		cache.setError(svelteRequest, e);
-		throw e;
+		throw toRollupError(e, options);
 	}
 
 	const affectedModules = [...modules];
diff --git a/packages/vite-plugin-svelte/src/index.ts b/packages/vite-plugin-svelte/src/index.ts
index eef2004bf..3b0e374e2 100644
--- a/packages/vite-plugin-svelte/src/index.ts
+++ b/packages/vite-plugin-svelte/src/index.ts
@@ -219,11 +219,7 @@ export function svelte(inlineOptions?: Partial<Options>): Plugin[] {
 				}
 				const svelteRequest = requestParser(ctx.file, false, ctx.timestamp);
 				if (svelteRequest) {
-					try {
-						return handleHotUpdate(compileSvelte, ctx, svelteRequest, cache, options);
-					} catch (e) {
-						throw toRollupError(e, options);
-					}
+					return handleHotUpdate(compileSvelte, ctx, svelteRequest, cache, options);
 				}
 			},
 			async buildEnd() {