diff --git a/packages/svelte/src/compiler/phases/3-transform/client/utils.js b/packages/svelte/src/compiler/phases/3-transform/client/utils.js
index 3c93f0fefe..9b75c73cbb 100644
--- a/packages/svelte/src/compiler/phases/3-transform/client/utils.js
+++ b/packages/svelte/src/compiler/phases/3-transform/client/utils.js
@@ -535,11 +535,12 @@ export function should_proxy_or_freeze(node) {
 }
 
 /**
+ * Whether a variable can be referenced directly from template string.
  * @param {import('#compiler').Binding | undefined} binding
  * @param {string} name
  * @returns {boolean}
  */
-export function is_hoistable_declaration(binding, name) {
+export function can_inline_variable(binding, name) {
 	// TODO: allow object expressions that are not passed to functions or components as props
 	// and expressions as long as they do not reference non-hoistable variables
 	return (
@@ -549,8 +550,18 @@ export function is_hoistable_declaration(binding, name) {
 		!binding.mutated &&
 		!binding.reassigned &&
 		binding.initial?.type === 'Literal' &&
-		binding.scope.has_parent() && // i.e. not when context="module"
 		!binding.scope.declared_in_outer_scope(name) &&
 		!GlobalBindings.has(name)
 	);
 }
+
+/**
+ * @param {import('#compiler').Binding | undefined} binding
+ * @param {string} name
+ * @returns {boolean}
+ */
+export function can_hoist_declaration(binding, name) {
+	return (
+		can_inline_variable(binding, name) && !!binding && binding.scope.has_parent() // i.e. not when context="module"
+	);
+}
diff --git a/packages/svelte/src/compiler/phases/3-transform/client/visitors/javascript-legacy.js b/packages/svelte/src/compiler/phases/3-transform/client/visitors/javascript-legacy.js
index 5271eac0e6..1bec065d5a 100644
--- a/packages/svelte/src/compiler/phases/3-transform/client/visitors/javascript-legacy.js
+++ b/packages/svelte/src/compiler/phases/3-transform/client/visitors/javascript-legacy.js
@@ -2,9 +2,9 @@ import { is_hoistable_function } from '../../utils.js';
 import * as b from '../../../../utils/builders.js';
 import { extract_paths } from '../../../../utils/ast.js';
 import {
+	can_hoist_declaration,
 	create_state_declarators,
 	get_prop_source,
-	is_hoistable_declaration,
 	serialize_get_binding
 } from '../utils.js';
 
@@ -29,7 +29,7 @@ export const javascript_visitors_legacy = {
 						.owner(declarator.id.name)
 						?.declarations.get(declarator.id.name);
 
-					if (is_hoistable_declaration(binding, declarator.id.name)) {
+					if (can_hoist_declaration(binding, declarator.id.name)) {
 						state.hoisted.push(b.declaration('const', declarator.id, init));
 						continue;
 					}
diff --git a/packages/svelte/src/compiler/phases/3-transform/client/visitors/javascript-runes.js b/packages/svelte/src/compiler/phases/3-transform/client/visitors/javascript-runes.js
index 1c097d3d84..e6724f7632 100644
--- a/packages/svelte/src/compiler/phases/3-transform/client/visitors/javascript-runes.js
+++ b/packages/svelte/src/compiler/phases/3-transform/client/visitors/javascript-runes.js
@@ -3,9 +3,9 @@ import { is_hoistable_function, transform_inspect_rune } from '../../utils.js';
 import * as b from '../../../../utils/builders.js';
 import * as assert from '../../../../utils/assert.js';
 import {
+	can_hoist_declaration,
 	create_state_declarators,
 	get_prop_source,
-	is_hoistable_declaration,
 	should_proxy_or_freeze
 } from '../utils.js';
 import { unwrap_ts_expression } from '../../../../utils/ast.js';
@@ -164,7 +164,7 @@ export const javascript_visitors_runes = {
 
 			if (init != null && declarator.id.type === 'Identifier') {
 				const binding = state.scope.owner(declarator.id.name)?.declarations.get(declarator.id.name);
-				if (is_hoistable_declaration(binding, declarator.id.name)) {
+				if (can_hoist_declaration(binding, declarator.id.name)) {
 					state.hoisted.push(b.declaration('const', declarator.id, init));
 					continue;
 				}
diff --git a/packages/svelte/src/compiler/phases/3-transform/client/visitors/template.js b/packages/svelte/src/compiler/phases/3-transform/client/visitors/template.js
index 0f6f88ffe1..a1b0fea8b8 100644
--- a/packages/svelte/src/compiler/phases/3-transform/client/visitors/template.js
+++ b/packages/svelte/src/compiler/phases/3-transform/client/visitors/template.js
@@ -17,9 +17,9 @@ import { is_custom_element_node, is_element_node } from '../../../nodes.js';
 import * as b from '../../../../utils/builders.js';
 import { error } from '../../../../errors.js';
 import {
+	can_hoist_declaration,
 	function_visitor,
 	get_assignment_value,
-	is_hoistable_declaration,
 	serialize_get_binding,
 	serialize_set_binding
 } from '../utils.js';
@@ -564,19 +564,21 @@ function serialize_element_attribute_update_assignment(element, node_id, attribu
 		}
 	};
 
-	let hoistable = false;
+	let can_inline = false;
 	if (Array.isArray(attribute.value)) {
 		for (let value of attribute.value) {
 			if (value.type === 'ExpressionTag' && value.expression.type === 'Identifier') {
 				const binding = context.state.scope
 					.owner(value.expression.name)
 					?.declarations.get(value.expression.name);
-				hoistable ||= is_hoistable_declaration(binding, value.expression.name);
+				// TODO: use can_inline_variable instead
+				// and insert template strings after module variables
+				can_inline ||= can_hoist_declaration(binding, value.expression.name);
 			}
 		}
 	}
 
-	if (attribute.metadata.dynamic && !hoistable) {
+	if (attribute.metadata.dynamic && !can_inline) {
 		const id = state.scope.generate(`${node_id.name}_${name}`);
 		serialize_update_assignment(
 			state,
@@ -588,7 +590,7 @@ function serialize_element_attribute_update_assignment(element, node_id, attribu
 		);
 		return true;
 	} else {
-		if (hoistable) {
+		if (can_inline) {
 			push_template_quasi(context.state, ` ${name}="`);
 			push_template_expression(context.state, grouped_value);
 			push_template_quasi(context.state, `"`);