What is a standard variable rate (SVR)?

Each mortgage lender has an SVR which tends roughly to follow the Bank of England’s base rate movements, but they can be anything from two to five (or more) percentage points above the base rate and vary between mortgage lenders.

It is important to note that this is the rate most borrowers end up on after their initial deal ends and they are often very expensive, with average rates way above those of cheap fixed rates as of September 2020. They are also very risky as you don’t know when the mortgage lender will move its rates for both commercial and economic reasons.

If interest rates are cut your rate will likely drop but if interest rates rise your SVR will almost certainly rise too and even though you may consider you are on a cheap SVR, it is likely that a cheaper fixed or variable rate is available.

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