keys icon

What is a standard variable rate?

Home Mortgages Guides What is a standard variable rate
Image of Leanne Macardle

Leanne Macardle

 Freelance Contributor
Published: 29/01/2019
Advertisement
Parents holding cardbaord over childs head to mimic a roof

At a glance

  • SVR means 'standard variable rate'.
  • You will revert to SVR when your initial mortgage deal ends and have not remortgaged to a new deal.
  • SVR rates are usually higher than a mortgage deal set over a period of time.

Guide contents

Compare the best mortgage rates

A standard variable rate (SVR) is a type of mortgage interest rate that you are most likely to go onto after finishing an introductory fixed, tracker or discounted deal.

Some lenders will also let you take out a mortgage on their SVR, but this is usually the most expensive option.

How does a standard variable rate work?

An SVR mortgage means your payments can go up or down according to changes in interest rates. 

Unlike tracker mortgages, SVRs do not track above the Bank of England Base Rate at a set percentage. Instead, the rate you pay on an SVR mortgage will be determined by your mortgage lender. So, if the Bank of England Base Rate went up by 1%, your lender could choose:

  • Not to increase the SVR.
  • To increase the SVR (they could choose to increase this by any amount less than 1%, 1% exactly or even make an increase greater than 1%).
  • To decrease the rate (although this is certainly the least likely of the three options!).

Mortgage lenders can also increase or decrease their SVR at any time – not only after Base Rate changes.

When on an SVR mortgage, you won't normally have to pay an early repayment charge if you want to pay off your mortgage sooner or remortgage to a new deal. However, SVRs can be quite expensive – certainly more so than the best tracker rate mortgages available.

Should I speak to a mortgage broker?

Mortgage brokers remove a lot of the paperwork and hassle of getting a mortgage, as well as helping you access exclusive products and rates that aren’t available to the public. Mortgage brokers are regulated by the Financial Conduct Authority (FCA) and are required to pass specific qualifications before they can give you advice.

 

Speak to a mortgage broker today

 

MAB is the preferred mortgage broker of moneyfactscompare.co.uk

 

Mortgage Advice Bureau logo

Get friendly, expert advice free of charge as a visitor of moneyfactscompare.co.uk.

Mortgage Advice Bureau have 1,600 UK advisers with 200 awards between them.

Speak to an expert mortgage broker today.

Call 0808 149 9177 or request a callback

Mortgage Advice Bureau offers fee free mortgage advice for Moneyfacts visitors that call on 0808 149 9177. If you contact Mortgage Advice Bureau outside of these channels you may incur a fee of up to 1%. Lines are open Monday to Friday 8am to 8pm and Saturday 9am to 1pm excluding bank holidays. Calls may be recorded.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Pros and cons of standard variable rate mortgages

  • May be no early repayment charges, giving you the flexibility to overpay, pay off the mortgage early, or remortgage to a new deal.
  • Arrangement fees for SVR mortgages tend to be lower than for trackers or fixed rates. There may be no arrangement fee charged at all.
  • If interest rates are low, then your repayments could go down.
  • SVRs are often the most expensive mortgage rates available, so you may be paying more than the best tracker or discounted rate mortgages around.
  • If interest rates go up, so will your payments.
  • Your mortgage will default to an SVR after any initial offer rate ends and if you don’t remortgage, your monthly payments are likely to rise significantly.

Moneyfacts tip

Moneyfacts tip Image of Leanne Macardle

Standard Variable Rate is a mortgage without any bells or whistles so it’s likely there are better deals out there – If you are on an SVR its’ probably a good idea to start investigating a new mortgage deal.

You may be interested in...

Search all mortgages

Compare the best variable rate mortgages

Speak to a mortgage broker

Compare the best variable rate buy-to-let mortgages

Mortgage calculator

Our mortgage calculator helps you to see how much your mortgage might cost you each month.

Our how much can I borrow calculator gives you a range of how much a lender might consider lending you under a mortgage. This calculation is only an indication only.

Compare the best mortgage rates

Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

Parents holding cardbaord over childs head to mimic a roof

At a glance

  • SVR means 'standard variable rate'.
  • You will revert to SVR when your initial mortgage deal ends and have not remortgaged to a new deal.
  • SVR rates are usually higher than a mortgage deal set over a period of time.
Compare the best mortgage rates

Guide contents

Related guides

Guides
guides icon
Should I use a mortgage broker?

A mortgage broker specialises in finding lenders who meet your specific needs for a mortgage. Find out how mortgage brokers can help and what fees to look out for.

A mortgage broker specialises in finding lenders who meet your specific needs for a mortgage.

Read More
guides icon
What income can I use for a mortgage application?

To get an accurate affordability check you'll want to know what counts as income, so you can declare everything you have to offer. Our helpful guide explains.

To get an accurate affordability check you'll want to know what counts as income, so you can declare everything you have to offer. Our helpful guide explains.

Read More
guides icon
Overseas Mortgages Explained

You must get an ‘overseas mortgage’ to purchase a house abroad – normally from a lender in the country you want to purchase in.

You must get an ‘overseas mortgage’ to purchase a house abroad – normally from a lender in the country you want to purchase in.

Read More
guides icon
Tips on finding the best estate agent

Your choice of estate agent can play a crucial part in the process of buying or selling a property. Take your time and make sure that you know exactly what services are being offered. Our helpful guide explains what to look for.

Your choice of estate agent can play a crucial part in the process of buying or selling a property. Our helpful guide explains what to look for.

Read More

Related guides

Guides
guides icon
Should I use a mortgage broker?

A mortgage broker specialises in finding lenders who meet your specific needs for a mortgage. Find out how mortgage brokers can help and what fees to look out for.

A mortgage broker specialises in finding lenders who meet your specific needs for a mortgage.

Read More
guides icon
What income can I use for a mortgage application?

To get an accurate affordability check you'll want to know what counts as income, so you can declare everything you have to offer. Our helpful guide explains.

To get an accurate affordability check you'll want to know what counts as income, so you can declare everything you have to offer. Our helpful guide explains.

Read More
guides icon
Overseas Mortgages Explained

You must get an ‘overseas mortgage’ to purchase a house abroad – normally from a lender in the country you want to purchase in.

You must get an ‘overseas mortgage’ to purchase a house abroad – normally from a lender in the country you want to purchase in.

Read More
guides icon
Tips on finding the best estate agent

Your choice of estate agent can play a crucial part in the process of buying or selling a property. Take your time and make sure that you know exactly what services are being offered. Our helpful guide explains what to look for.

Your choice of estate agent can play a crucial part in the process of buying or selling a property. Our helpful guide explains what to look for.

Read More

Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.

Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.