How SVR works
With a Standard Variable Rate (SVR) mortgage, your repayments are determined by your lender’s own variable rate, not directly by the Bank of England (BoE) base rate. The lender chooses when and by how much to alter its SVR.
What influences the rate
While BoE base rate movements often influence lenders, they’re not obliged to follow. Lenders may change their SVR after a BoE move, or not, and can also change rates independently. SVRs are often 2% to 5% above the base rate (sometimes more).
Cost predictability
SVRs generally do not include introductory incentives and can be more or less costly than other products over time. Unlike fixed rates, your monthly payment can vary at any time.
Fees and charges
SVR products often have lower arrangement fees than trackers or fixed-rate deals. If you repay early, you might avoid early repayment charges, subject to your lender’s terms.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
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