Standard Variable Rate MortgageLearn more about the Standard Variable Rate

The term standard variable rate mortgage refers to the interest rate mortgage deal you will have when your initial introductory rate ends. Every lender has a standard variable rate of interest on which it bases all of its mortgage deals. Think of it as the default interest rate, when no special rates have been offered. A lender’s standard variable rate mortgage interest is actually based on the Bank of England base rate, although it will usually be several percentage points higher. When the base rate rises, so will your standard variable rate mortgage, and likewise when the base rate decreases, you will see the results in your standard variable rate mortgage changes. More info

You may have noticed an unusual situation at the moment where the introductory mortgage interest rates are actually higher than the standard variable rate mortgage deals on the market. This is because the standard variable rate mortgage is currently tracking the (very low) base rate, whilst the introductory offer is set to be fixed for 2, 5 or 10 years. Interest rates are expected to rise as the economic situation improves, so you will find that by the time you revert to the standard variable rate mortgage from your introductory fixed rate, the lender’s standard variable rate will be higher once more. Unfortunately not many lenders would allow you to take the standard variable rate mortgage from the start of the mortgage term, as this would provide good value for money in the current climate. Usually, when you revert to a standard variable rate mortgage, you should shop around to see what else is available because the standard variable rate is hardly ever the most competitive interest rate in the market. Less