Standard Variable Mortgages

Variable Rate Mortgages

With this type of product the monthly repayment figure can either increase or decrease in accordance with the Lenders interest rates at the time. You always pay the current rate with no hidden extra charges. The rate is normally influenced by the Bank of England’s Base Rate. Be aware that this can vary amongst the lenders in the Market place. Generally there are no arrangement fees payable. It is usually the rate that customers revert to after a fixed, capped or discount period ends.

Most people don't choose an SVR mortgage; it's the rate you are automatically switched to when your initial offer period expires. For this reason it's good to think about re-mortgaging a few months before this would happen so you can take advantage of a better mortgage deal, but check you aren't tied in first. But it's never too late to remortgage to a cheaper deal just check the terms and conditions first.

What does it mean for you ?

• Usually you can leave your lender without any penalties or problems.
• You're in control. You can usually pay back extra amounts (and cut your interest costs) without a penalty.
• It moves with interest rates. So if interest rates go up, so will your monthly payment.
• It will almost certainly be expensive compared to other deals.
• The lender may not reduce, or may delay reducing, their variable rate even if the Bank of England rate goes down.