By Dom Spencer - April 4th, 2024 Posted in Mortgage Guides No comments


If you’re trying to decide on the right mortgage for you, knowing a little about the products available is a great place to start.

When taking out a fixed-rate or remortgaging for the first time, you’ll likely come across the term “Standard Variable Rate” (SVR) mortgage.

In this guide, we’ll unpack what SVR mortgages are, how they operate, their perks, drawbacks and whether they could be right your needs.

Let’s dive in!

What’s a Standard Variable Rate Mortgage?

Simply put, an SVR mortgage is the default interest rate set by a mortgage provider.

All lenders have their own SVR, which you’ll automatically move onto after your fixed-rate, tracker or discount mortgage term ends.

Unless you choose a new fixed-term deal at the end of your term, (which most people do) you’ll move onto your lender’s SVR.

How Does an SVR Mortgage Work?

Unlike fixed-rate mortgages, which lock in your interest rate, SVR mortgages can be changed anytime at the lender’s discreation.

While lenders set their SVRs to reflect the Bank of England’s (BOE) interest rates, they can change their rates independently of the BOE’s rate too.

This can make budgeting tricky if you’re on an SVR, since your payments can fluctuate and be highly unpredictable.

Can I Take Out an SVR Mortgage?

Yes, you can but move straight onto an SVR mortgage, but they’re not very popular due to their high unpredictability.

Most people prefer the stability of fixed-rate mortgages.

However, if you’re someone who prioritises flexibility above all else, an SVR mortgage might be something to consider.

With an SVR mortgage, you can make overpayments and switch deals without strict terms holding you back.

Ordinarily, homeowners would still opt for a tracker mortgage instead of going onto the SVR.

What to Keep in Mind

SVR mortgages come with a some pros and cons:


  • Lower arrangement fees
  • Fee-free overpayments
  • Payments might drop when interest rates decrease


  • Budgeting can be tough with fluctuating payments
  • Rates can be much higher than fixed-term options
  • If repayments aren’t met, you might not be able to move lender until debts are settled

Should You Consider an SVR Mortgage?

Understanding how SVR mortgages work is vital for making informed decisions.

While they offer flexibility and some perks, their unpredictability and higher rates don’t suit most people.

Before diving in, weigh the pros and cons, think about your financial situation and explore all your options.

If you’re thinking about an SVR mortgage or tracker mortgage, why not chat with one of our CeMAP qualified advisors?

They can help you make smart decisions that match your long-term financial goals.

Contact now

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