What is SVR?

A quick overview

Learn what a Standard Variable Rate (SVR) mortgage is, how it works, and why your monthly payments can change when interest rates fluctuate. Explore when moving onto SVR may be appropriate and what to consider before choosing your next mortgage deal.

Transcript

SVR stands for Standard Variable Rate. It’s the interest rate a mortgage lender applies to their standard mortgage; without any fixed deal or discounts.

How does SVR work?

SVR is a variable interest rate based on the Bank of England base rate.

Being on SVR can make managing your monthly mortgage repayments unpredictable. That’s because the Bank of England can make changes to the base rate. If that happens, it may affect SVR, and your mortgage repayments would change.  

Should I avoid being moved onto SVR?

Most lenders will contact you before your mortgage term ends. You can choose a new mortgage deal with your current mortgage provider or switch to another provider before your term ends.

If you don’t choose a new deal, you’ll automatically be moved onto your lenders SVR rate.

Why might you consider going onto SVR?

Sometimes an SVR mortgage can be a short-term option if you want flexibility with your mortgage. Or you're coming to the end of your mortgage term and don’t want to lock into another deal right away. 

You may also consider SVR if you know your circumstances are changing in the near future.

For example, if you’re expecting a change to your household income. Or if you want to move home without porting your mortgage or paying and Early Repayment Charge. 

There's no need to fear SVR. But it’s good to understand it, so you can make educated decisions about your mortgage.

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