A guide to Standard Variable Rate (SVR) mortgages

A guide to Standard Variable Rate (SVR) mortgages

Often referred to as ‘SVR’ for short, a ‘Standard Variable Rate’ mortgage rate is one that is usually set by a bank, building society or specialist lender. The SVR tends to be lower than other available deals like fixed rates and tracker rates but can also change at any time. The reason for this is that the SVR tracks the Bank of England (BoE) base rate. For example, if the BoE rate goes up, it is likely that a lender will increase their interest rates and yes, you’ve guessed it, if the BoE rate goes down it is likely that a lender will reduce their rates.   

The good news of course is that if your mortgage is on an SVR, any rate reduction (usually brought about by the BoE base rate changing) could quickly result in reduced monthly mortgage payments (although it has to be said – not always).  

However, the risk of your mortgage being on an SVR is that if the underlying rate increases, this could in turn mean increased monthly mortgage payments for you which you potentially have no control over.  

If we take a look back at August 2018, the Bank of England base rate increased from 0.5% to 0.75% and following on from this, 43 out of 87 mortgage providers increased their SVR to existing customers by at least 0.25%. This, in turn, could have had a detrimental effect on a customers’ financial situation if they were not prepared for it. Whilst relatively small rate increases can be manageable for most people, multiple rate increases in close succession could be rather more worrying and could potentially have a catastrophic effect on some peoples’ finances. 

One of the benefits of an SVR mortgage is that unlike fixed rate or tracker mortgages, they tend not to have any ‘Early Repayment Charges’, providing you with the flexibility to pay off your mortgage quicker or switch to a new mortgage deal without penalty.  

Before deciding what type of mortgage rate meets your needs, it is important to fully understand your own priorities. For example, if you want fixed monthly payments without the possibility of increases for a set period of time then a fixed rate mortgage may be right for you. On the other hand, if you know you want to move in the near future or repay your mortgage early then a SVR rate mortgage may be right for you. When making this decision it can often save both time and money to gain advice and guidance from a mortgage expert like Mortgagez.  

Here at Mortgagez, our team of fully qualified mortgage advisers are on hand to help you every step of the way with your mortgage journey and our service won’t cost you a penny when you go via our online portal. Visit our website today and obtain a quick quote to see how much you could save on your next mortgage.  


Any guidance and/or advice contained within this document is subject to the UK regulatory regime and is therefore restricted to consumers based in the UK. Any technical or regulatory information contained within this document was correct at the time of producing it but as it may be subject to change it should not be exclusively relied upon when making a financial decision. The Financial Conduct Authority does not regulate advice on Buy to Let mortgages.  

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