Variable Rate

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Standard Variable Rate Mortgages

The interest rate on a standard variable rate (SVR) mortgage or remortgage can change (up or down) during the course of the mortgage. The rate might remain unchanged for months at a time, or it may fluctuate from one month to the next.

The SVR charged by mortgage lenders is based on various factors. However, it is mainly determined by the Base Rate set by the Bank of England. The Bank of England reviews the Base Rate once a month. When the Bank of England changes the Base Rate, the high-street banks, building societies, and other mortgage lenders will usually adjust their SVR up or down accordingly.

In 2003, variable rates were at an all time low of around 4%. Recent increases to the Base Rate have pushed up standard variable rates, but they are still comparatively low. In the past there have been periods where they were much higher – up to 15% or more.

Because of this degree of uncertainty, it is important to consider the impact of any future rise in interest rates when opting for a variable rate mortgage.

If you would like more advice on any aspect of mortgages or remortgages, please complete our online enquiry form and a mortgage consultant will contact you for a no-obligation discussion.

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