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
Forbes has published a global ranking of stunning locations and one popular picturesque corner of the UK has nabbed top spot.
Over three years after the Mini-Budget took place, we look at what the mortgage market looks like now, showing the difference in mortgage repayments.
The government has announced plans to make buying or selling a home cheaper and quicker with what is being called the “biggest shake-up to the homebuying system in this country’s history.”
More borrowers using equity release
24 days ago
Almost one in five equity release mortgages are now taken out to provide financial support to family.
Buyers purchasing properties sooner
26 days ago
According to industry data, the expected wait for those looking to buy a property has dropped from just over 11 months to less than six months.
It is common for your first mortgage payment to be higher than your subsequent monthly payments for two reasons.
What to do just before you get your keys
24 Sep 2025
Firstly, a big congratulations, you’ve now exchanged contracts! After weeks and months of waiting, you are about to move in. What should you do first?
The chancellor will deliver her second budget this autumn. Due to slow economic growth and high inflation, the government need to manage a £40 billion shortfall in public finances. There have already been reports about changes to taxes including income tax and capital gains tax.
More information
Trusted by
