What is a Standard Variable Rate Mortgage?
Known as an SVR in the mortgage world a Standard Variable Rate Mortgage rate is usually set by a building society, bank of specialist lender. SVR’s tend to work out lower than other deals such as a Fixed Rate Mortgage and Tracker rates BUT can change at any time.
Why?
SVR tracks the Bank of England (BoE) base rate, so if the BoE rate goes up, it is pretty much a no brainer that your lender will most likely increase their interest rate, and if the BoE base rate goes down it is more than likely that your lender will also reduce their rates.
So be prepared if you chose a SVR mortgage, you could look at both a chance that your mortgage repayments could go up meaning you will be paying more per month, or less if the BoE base rates reduce.
The Benefits of a Standard Variable Rate Mortgage
Unlike Fixed Rate Mortgages or Trackers Mortgages that tend to not have any “Early Repayment Charges” an SVR Mortgage can give you the flexibility to pay off your mortgage quicker or switch to a new deal without incurring a penalty charge.
How to choose the right Mortgage for you
It is really important to understand your own priorities. If you want a fixed monthly payment that you know will stay the same price for a set period of time, then a fixed rate mortgage may be the right option for you. BUT if you know you want to move in the near future or repay your mortgage early then an SVR rate mortgage could be the option for you.
The best advice we can give you is to pick up the phone and speak to us. We are here to listen and give you the best advice we can based on your personal needs.