Standard Variable Rate (SVR)

The Standard Variable Rate (SVR) is the default interest rate that UK mortgage lenders apply to borrowers after the initial fixed, tracker, or discount period of a mortgage ends. Unlike fixed-rate or tracker mortgages, the SVR is not directly tied to the Bank of England's base rate, meaning it can change at the lender’s discretion. This variability means that monthly mortgage payments under an SVR can increase or decrease, depending on the lender's decisions.

Lenders often set their SVR higher than their introductory rates, making it less attractive for borrowers. As a result, many homeowners choose to remortgage to a new fixed or tracker deal before their current deal ends to avoid moving onto the SVR. However, understanding the SVR is important, as it can impact your mortgage payments if you don’t re-mortgage in time or if you choose to stay on the SVR for flexibility.

The Standard Variable Rate (SVR) is an important concept for UK homeowners to understand, as it can significantly impact mortgage payments after an initial deal ends. By being aware of when your mortgage may switch to the SVR and exploring remortgaging options, you can better manage your financial commitments and potentially save on interest costs. Always review your mortgage terms and consider seeking advice to ensure you're on the best deal for your circumstances.