variable rate mortgages

Variable Rate Mortgages

explained

Every mortgage lender has it's own Standard Variable Rate (SVR). Each lenders SVR is often quoted as a +% of the Bank of Englands base rate. The SVR of a lender is the rate that any borrowers move on to once any discount, fixed or capped period comes to an end. SVR loans are the simplest kinds of products out there in the market.

Lenders are free to move their SVRs independently of base rates however competition amongst lenders means that in reality SVRs often follow very closely the rates set by the Bank of England. What can be noted however is that the mortgage companies tend to increase their SVRs in a more timely manner than lower them as a response to movements in the base rate.

SVR mortgages offer a simpler, more transparent type of loan whereby there are less complications such as discount periods, fix periods to consider. The main two factors to consider when comparing such loans are firstly the set up/valuation fees that the mortgage company will make you pay to get the mortgage up and running and also the future movement of the Bank of England base rates, which your rate will tend to follow.