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Standard Variable Rate
Have you been told you’ll be moving to a standard variable rate (SVR) when your current mortgage deal ends? Or just want to understand more about how standard variable rates work? You’re in the right place.
You could lose your home if you don’t keep up your mortgage repayments
Let’s take a closer look
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There are no early repayment charges for switching or remortgaging away from an SVR. It’s up to you how long it lasts. You could stay on the SVR for the rest of your mortgage term, or you could switch to a new mortgage deal at any time.
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Standard variable rates usually have higher interest rates than a fixed mortgage, meaning they could be more expensive. It may be cheaper if you switch to a fixed rate mortgage when your current mortgage deal ends, rather than move to the SVR. But, if you want to repay your mortgage early or make overpayments, early repayment charges don’t usually apply if you’re on an SVR, meaning they may be more flexible.
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A tracker mortgage also has a variable interest rate, which means your interest rate can go up or down during your mortgage term. The rate is made up of the Bank of England Base Rate, also known as the Bank Rate, plus or minus a percentage. This means it will only change if the base rate changes.
Another difference is that early repayment charges usually apply for a certain amount of time after you take out a new tracker mortgage.
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