What is a Standard Variable Rate?
A Standard Variable Rate (SVR) is your lender's default mortgage rate. When your fixed, tracker, or discount period ends, you'll usually move onto the SVR automatically. This rate is set by your lender and can change at their discretion, regardless of what happens to the Bank of England base rate.
SVRs are typically significantly higher than the best available mortgage rates. They exist partly because some borrowers don't remortgage when their deal ends, whether due to unawareness, inertia, or changed circumstances that make remortgaging difficult.
Why SVRs Are Usually Higher
Lenders don't compete on their SVRs in the same way they compete for new business. The most attractive rates are reserved for new customers or existing customers actively switching products. SVRs often run 1-2% or more above competitive new deals, meaning you could be paying hundreds of pounds extra each month unnecessarily.
Being on an SVR isn't always wrong, but for most borrowers it's worth checking whether switching to a new deal would save money. The savings over a mortgage term can be substantial.
When an SVR Might Make Sense
There are limited circumstances where staying on an SVR could be appropriate. If you're planning to sell your home within a few months, avoiding a new deal with early repayment charges might be sensible. SVRs also offer complete flexibility - you can usually overpay without limits or leave without penalties.
Some borrowers stay on SVRs because they can't remortgage due to changed circumstances - reduced income, credit problems, or changes to property value. Even in these cases, speaking to a broker might reveal options you weren't aware of.
Should You Remortgage Off Your SVR?
For most borrowers on an SVR, the answer is yes - remortgaging to a competitive rate will save money. The remortgage process is straightforward and often involves no fees if you work with a broker. Free valuations and legal services are common for remortgage products.
Our brokers can quickly compare your SVR against available deals and show you how much you could save by switching. Complete our form for a free, no-obligation quote.