The Standard Variable Rate quoted by a lender is the interest rate that a lender chooses to apply to mortgages, typically when a customer’s fixed rate or tracker rate ends. Unlike a tracker mortgage, the Bank may choose not to follow the specific indices linked to the tracker mortgage (usually the Bank of England’s Base Rate) when adjusting their Standard Variable rate.
Therefore, the Bank of England Base Rate might rise by 0.5% but unlike in the case of a Tracker Mortgage, the lender may choose not to adjust its standard variable rate, or delay such an increase. It could even reduce its rate, although this would be unlikely in such circumstances.
In most scenarios it is reasonable to assume that the bank’s Standard Variable Rate will rise and fall roughly in line with increases and decreases in the Bank of England’s Base rate over the medium term, but there may be a time lag or the bank may choose to adjust its rate independently.
Unlike a tracker, there is no guarantee as to what the rate will do when the Bank of England changes its Base Lending Rate but, in most cases, mortgages that revert to a standard variable rate are unlikely to have very large penalty clauses for early repayment, meaning that most of us can remortgage without too much expense were a lender were to unilaterally raise its standard variable rate above the market.
It is therefore critical that you establish all the terms of a mortgage when considering your options. Contact us or call 01628 507477 for more information.
Related articles:
- What is a ‘Fixed Rate Mortgage’?
- What’s So Important About the Bank of England’s Base Rate?
- What is the LIBOR Rate and How is it Calculated?
Download our Free First Time Buyers Guide
Recent posts
According to a report in the Guardian, senior ministers have asked Treasury officials to look into a “proportional” property tax to see how it would work as an alternative to the existing stamp duty land tax on owner-occupied homes.
More than a quarter of UK adults in long-term relationships (26%) have reported that despite living together, they keep their finances separate from one another.
There has been a rise in both rent and mortgage costs over the last three years, with renters seeing a greater increase in their monthly payments than those with a mortgaged property.
Delayed Start Mortgages
14 days ago
The new Delayed Start Mortgage launched by Skipton Building Society allows first time buyers to postpone the first three mortgage payments. This product has been designed to help soften the blow of moving in costs for first time buyers.
Green Mortgages | Rewards and Benefits
16 days ago
Mortgage lenders are starting to recognise their “Green” responsibilities when it comes to the different products they offer.
A recent study by Boon Brokers where 1,000 people who had used an estate agent over the last year were surveyed, showed that a whopping 52% said they were pressured into using the estate agents’ in-house mortgage broker.
When will mortgage rates fall further?
26 days ago
Analysts are predicting further rate cuts this year, with the next one possibly coming down to 4% when the Bank of England’s Monetary Policy Committee meet on Thursday 7th August 2025.
The Financial Conduct Authority (FCA) has shared new changes to mortgage rules with the aim to simplify remortgaging, and encourage competition within the mortgage market.
More information
Trusted by
