Introducing Intermediary Intel 1: Customers on SVR
In this article
Introducing Intermediary Intel
Introducing Intermediary Intel, a quarterly research piece produced by Principality Intermediaries designed to provide market and customer insight for brokers.
In our first edition, we explore why mortgage customers choose to stay on a Standard Variable Rate (SVR).
Why customers stay on SVR
Like many other lenders, Principality Building Society has customers who choose to stay on the Standard Variable Rate at the end of their initial mortgage deal.
In addition to communicating with these customers when their SVR changes, usually as a response to Bank of England interest rate changes, the Society, as part of their Consumer Duty commitments, is adopting a more targeted approach with this group.
In 2025, working with the research agency Boxclever*, we engaged with our SVR customers, customers on SVR with competitors, brokers and internal stakeholders. The aim was to understand their motivations and how best to engage them with SVR communications.
The research included social listening, qualitative interviews and consultation on current communication approaches.
What we found
| Headline | Key Finding |
|---|---|
| Mortgage engagement is low | Typically customers only re engage when action feels necessary or clearly beneficial. |
| The broker picture | Most borrowers in our sample reverting to SVR appeared not to have engaged with a broker about this decision*. Brokers told us that compliance guidance mean that they would rarely recommend reverting to SVR, and certainly not for a 12 month+ period of time. |
| The customer perspective | Customers on SVR, particularly those with a low mortgage balance, are not interested in engaging with brokers, even if they previously had. Reasons given were too much effort and, from both broker and customer with low balances, the cost of the broker service might be too high for the ‘gain’. |
Types of SVR customers
The research identified four main types of SVR customers.
| Type of customer | What they look like |
|---|---|
| Flexibility seekers | These customers deliberately chose to stay on SVR in the short term. For them, the flexibility of SVR makes the additional cost worth paying. Penalties and product fees may discourage them from switching to another deal. They may be selling their property, re-mortgaging or want flexibility in relation to overpayments. They may be waiting for rates to go down, a cash lump sum or clarity on future plans. |
| Deliberately unengaged | These customers often have low balances and are coming to the end of their mortgage term. Their mortgage is a low priority. They don’t think moving from SVR is worth the effort, their monthly repayment hasn’t changed for a while and they trust their lender. |
| Feeling trapped | This group fear switching or cannot currently switch as they are in arrears. They know they may be better off switching but worry that looking for a new product might affect their current position e.g. because of credit checks. They may have complex circumstances which discourage them from pursuing a better option. |
| Misunderstanding SVR | This group don’t understand SVR. Some of this group understand variable rate but not the product they are on. They don’t want a fixed rate and believe the rate they are on is good. Some of them don’t know what rate they are on and how it compares to others. Some of them have limited financial literacy and may have false confidence. They distrust brokers. They don’t think they need to switch as they believe they are on the right mortgage rate for them. |
Key learnings
| Key Learning | What this means |
|---|---|
| Clear, personalised financial benefit drives engagement. | Messages that led with a concrete saving amount were immediately understood and more likely to prompt action. |
| A strong, simple call to action matters. | Messages that clearly explained what to do next and reduced perceived effort were more compelling. |
| Clarity beats flexibility as a headline. | Even Members who value flexibility tended to prefer messages focused on “how much could I save?” over flexibility‑led messaging. |
| Reassurance reduces perceived switching effort. | References to switching being simple, free, and supported - including access to an expert leads to increased confidence. |
| One format doesn’t suit all. | Communication channels e.g. email, telephone, text options need to vary to suit all customers. |
*Research Report: SVR Mortgage Motivations: Why do members revert to SVR and then stay on it, and how can our communications influence this behaviour? (December 2025, Boxclever on behalf of Principality Building Society). This included 20 online depth interviews with Members and competitor customers.
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