What is a variable rate mortgage?
Variable Rate Mortgages
Mortgage deals usually move onto the lenders Standard Variable Rate (SVR) after a fixed rate, or introductory period has ended. The SVR is your mortgage lenders “default” or standard product usually after the initial period has expired.
SVR deals can go up and down and is your lenders choice as to what the rate will be and how much interest they will charge. Generally SVR deals are in alignment with the BOE base rate, however this isn’t always case and shouldn’t be confused with a tracker mortgage.
Variable rate mortgage vs a fixed rate deal?
Since we have had a long period of all time low interest rates, we have also had a long period of low rate SVR mortgages. Many people on Standard Variable Rate mortgages are paying low rates of interest and are happy to continue on the product.
What are the drawbacks to variable rate mortgages?
The lender could at any time increase their SVR mortgage product rates and you may be forced into a position of having to find a better deal to keep costs down.
What mortgage deals are out there?
You can simply use the mortgage search here on the website to view and compare the deals side by side. Alternatively you can speak to a mortgage expert who will go through all the options and choices open to you.