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Our Guide To Standard Variable Rate (SVR) Mortgage

Money Savings Advice guide to standard variable rate mortgages

You might choose the Standard Variable Rate (SVR) when you apply for a mortgage. There’s also a chance that your chosen mortgage lender will move you to this automatically, especially if you’ve had a fixed-rate mortgage that’s come to the end of its term.

What Is a Standard Variable Rate (SVR) Mortgage?

A Standard Variable Rate (SVR) mortgage has interest rates that rise and fall. You could benefit from interest rates dropping, or you might have to pay more each month. You will normally be moved onto an SVR mortgage at the end of any deal period.

With a Standard Variable Rate (SVR) mortgage, you’re at the mercy of financial fluctuations.

Read on to learn more about the Standard Variable Rate.

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How Does A Standard Variable Rate (SVR) Mortgage Work?

With a Standard Variable Rate (SVR) mortgage, your interest rates will rise and fall. It’s likely that your monthly payments will constantly be changing.

It’s harder to set a clear household budget if you have a mortgage with a Standard Variable Rate.

Who Is A Standard Variable Rate Mortgage For?

Variable rates are often cheaper than fixed rates because lenders don’t need to lock in higher interest rates to make sure they’ll make the profit they need. This means that they’re preferred by people with spare money, who can afford to cope with payment fluctuations and want the chance to pay less for their mortgage.

A fixed-rate mortgage is ideal for those that need predictability and security, but a variable mortgage adds an element of risk in exchange for potential savings.

With the Standard Variable Rate, you need to be particularly careful. Most lenders offer different variable-rate mortgages, with the Standard being one of several options. Though variable rates often work out cheaper, that’s not always the case if you’re on an SVR mortgage.

The Standard Variable Rate is typically the default package that you’ll move to when another deal expires, so the interest rates are often much higher and you’ll want to look at all your other options.

If you imagine a mortgage like a credit card, or a car insurance policy, the best prices often come to an end. It’s in your favour to never let things happen automatically. Renewing your car insurance with the same provider usually works out more expensive than taking the time to shop around, and when your interest-free credit card deal runs out a balance transfer is a good idea.

The same applies with your mortgage, and allowing yourself to be automatically put onto an SVR might not be best.

Very few people would choose the Standard Variable Rate when given an extensive list of options, so you might find that this isn’t the best mortgage available. By all means, consider a Standard Variable Rate, but don’t settle on this as the default.


There are 10.94 million outstanding mortgages in the UK (May 2019).

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Statistics Around SVR Mortgages

According to a study conducted by Which?, it was found that around 25% of respondents were on a Standard Variable Rate mortgage purely due to their existing mortgage deal has ended. The study also found that, on average, people on an SVR mortgage were paying as much as £347 per month more than those who were not, and when you isolate London in the statistics this figure shoots up massively to £727 per month or an extra £8,700 per year.

Alarmingly, 22% of those on an SVR mortgage said they hadn’t thought about switching, and another 15% had considered it but didn’t view it as worth the hassle.

SVR When Other Rates End

When another deal comes to an end, you may be automatically moved to a Standard Variable Rate. Most people think about the option to remortgage and find a better rate elsewhere, but you’ll also need to think about potential remortgaging costs.

Lenders sometimes issue an early repayment charge, though this is much less common with an SVR mortgage than other types of fixed or tracker mortgages. You’ll pay the early repayment charge if you want to break out of your mortgage deal before your final payment.

In some cases, the early repayment charge is higher than the savings you’ll make by moving elsewhere. Sometimes, it’s best to sit tight with your current mortgage.

If you’re not sure that a Standard Variable Rate mortgage is the right one for you, make sure you start to look around before your current deal ends. You can then switch over to a different rate without penalties for early repayment. If you leave things too late, you might be switched automatically and subject to further fees and charges.

Mortgage lenders rely on your apathy. They can make more money from disinterested customers that are happy to take the back seat. By taking control of your financial products, you’ve got the best chance of saving some money.

Standard Variable Rate As A New Customer

Most lenders use their Standard Variable Rate as a mortgage you’ll move onto when your existing deal runs out. Very few lenders let you choose the SVR straight away. When you’re shopping around for a mortgage, the chances are that Standard Variable won’t be an option. If you do find one that you can actively choose, it’s likely to be quite expensive.

As a new customer, it typically makes sense to look for another type of mortgage. This can still be a mortgage with a variable rate, though Standard isn’t usually cheapest.



Benefits Of A Standard Variable Rate

It might seem like there’s nothing positive about being on the Standard Variable Rate. A Standard Variable Rate mortgage is often expensive and isn’t what most people would choose. But, there is one solid benefit to this type of mortgage.

Usually, without early repayment charges, this type of mortgage is flexible. You can move away, or remortgage, at any time without penalty. Whilst some SVR mortgages do have charges, most typically won’t. Check the terms and conditions of any mortgage to see if there are things you’ll be charged for.

Since most Standard Variable Rate mortgages don’t come with charges for early repayment, it can make sense to sit on them for a few months if you’re planning to sell your house soon. The Standard Variable Rate might also be suitable if you’re taking a few months to make some plans before you decide to remortgage and get a better deal.

Watching Out For Changes

Your mortgage lender can change their Standard Variable Rate at any time. To do your best financially, you should always take the time to monitor your current mortgage. Keep an eye on fluctuating prices and make sure that you’re getting the best deal.

If you can save money by remortgaging your property, doing nothing will only waste cash.

Standard Variable Rate Mortgage Options

The Standard Variable Rate mortgage is just one of several ways to borrow money to buy your own home. Whilst these mortgages are flexible, they’re often more expensive than most of your other mortgage options.

Lenders will use their Standard Variable Rate as the default if another deal ends. You’ll be moved onto this rate automatically, but could save money by shopping around for better rates.

A Standard Variable Rate is a type of tracker mortgage, with prices that can change every month. Your interest rate can fluctuate, rising and often falling in line with economic changes, and the price may be influenced by other factors as well.

Quick Mortgage FAQs


When you have an offset mortgage, you’re making a decision to give up your savings interest in exchange for a better mortgage deal. Your savings are used to offset your mortgage, so you’ll be able to clear your debt quicker.

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A flexible mortgage is a more relaxed form of borrowing to pay for your home.  You’ll be able to make overpayments, contributing more than you’re asked by the lender and reducing the time that you’re in debt for. By overpaying and clearing your mortgage early, you’ll pay less interest overall.

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Capped rate mortgages are variable mortgages that have an upper-interest cap. Though your interest rate might fluctuate, with a capped rate it won’t go above a certain level. Capped rate mortgages provide some financial security.

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Capped rate mortgages are variable mortgages that have an upper-interest cap. Though your interest rate might fluctuate, with a capped rate it won’t go above a certain level. Capped rate mortgages provide some financial security.

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With a tracker mortgage, your monthly payments will fluctuate. Your interest rate will rise and fall, influenced by several factors, which could work in your favour or mean that you’re charged more through your mortgage term.

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Discounted rate mortgages are variable mortgages with temporarily reduced interest rates. For a short time, usually a term of around two years, they’re cheaper than a mortgage lender’s standard variable rate.

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A Standard Variable Rate (SVR) mortgage has interest rates that rise and fall. You could benefit from interest rates dropping but might also see an increase in how much you pay every month.

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With a fixed-rate mortgage, your interest rate will stay the same for an agreed length of time. This makes mortgage payments much more predictable and can work in your favour or against you.

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An interest-only mortgage is one borrowing option and is certainly not the most popular, but could suit your needs if you’re purchasing a buy-to-let property.

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With a repayment mortgage, your payments every month will cover the interest that you owe. They’ll also clear some of your mortgage capital, reducing your overall debt.

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How Can Money Savings Advice Help You With A Mortgage?

Here at Money Savings Advice, we have partnered with some of the UK’s leading mortgage brokers. They have already helped thousands of people get the best mortgage deal and they can do the same for you.

Choosing an independent adviser means they won’t recommend a mortgage unless they are sure it is in your best interests. Their advice is also regulated by the FCA, which gives you an additional layer of protection.

If you would like to speak to one of these brokers who can provide you with a ‘whole market quote’ then click on the below and answer the very simple questions.

Len Burgess

Len Burgess is a professional financial writer who over the last five years has written hundreds of articles for all financial sectors. Len founded Money Savings Advice with the aim of helping consumers navigate their way around the financial world by providing easy to understand financial information and matching consumers with the best financial advisor based on their personal information.

Len Burgess

Len Burgess is a professional financial writer who over the last five years has written hundreds of articles for all financial sectors. Len founded Money Savings Advice with the aim of helping consumers navigate their way around the financial world by providing easy to understand financial information and matching consumers with the best financial advisor based on their personal information.

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