Variable-rate mortgages

Your mortgage lender’s standard variable rate (SVR) is the interest rate you’ll be charged once the introductory deal on your discount, tracker or fixed mortgage ends.

Lenders set their own SVRs and the interest you pay can go up or down each month. That means, as the name suggests, the monthly repayments of standard variable rate mortgages are hard to predict.

The interest rates on SVR mortgages also tend to be higher than other types of mortgage.

For example, in October 2025, the average standard variable rate was 7.6% according to Mojo Mortgages, while the average two-year fixed rate was 4.75% and five years was 4.98%. So if you don’t switch or remortgage once your introductory deal ends, your monthly repayments could end up costing you much more than you might otherwise pay. 

Your home may be repossessed if you don't keep up repayments on your mortgage.

With an SVR mortgage, the interest you’ll pay each month on your mortgage will vary according to your lender’s standard variable rate.

If your lender’s SVR goes up, that means your monthly repayment will go up too. And if it goes down, so will your repayments.

Unlike most tracker mortgages, standard variable rate mortgages don’t track the Bank of England base rate plus a set percentage. Your lender decides the rate you pay.

So, for example, if the Bank of England base rate goes up by 1%, your lender could choose to:

• Increase its SVR by 1%

• Increase its SVR by more than 1%

• Increase its SVR by less than 1%

• Make no changes to the SVR (unlikely)

• Decrease its SVR (even more unlikely).

If your lender increases its SVR, your monthly mortgage repayments will go up. The extra money you pay goes towards the higher interest, so paying more doesn’t mean you’ll be paying off your mortgage sooner.

If you’re on a standard variable rate mortgage, you need to be sure you can cover the monthly repayments if they increase.

Standard variable rate mortgages don’t have the same restrictions as fixed-term mortgages. This means that you won’t be locked in for a set length of time, so you're free to switch to a cheaper mortgage whenever you like.

This is usually a sensible option unless you’re very close to paying off your entire mortgage, or likely to move house soon.

As a rule, you don’t ‘take out’ an SVR mortgage – it’s a default rate you’re automatically moved onto when your existing mortgage deal comes to an end. You can stay on it for as long as you like, and there’s usually no penalty to switch to another deal with a different lender.

Most borrowers choose not to stick with their lender’s SVR as they’re so expensive.

Your alternatives typically include:

• A fixed-rate mortgage – with a set rate of interest, typically for two, three or five years. This makes it easier to budget as your monthly repayments will be the same throughout this period.

• A tracker mortgage – your mortgage interest rate is linked to another rate – usually the Bank of England base rate – plus a percentage, e.g. 1%. Each time the rate that it’s linked to changes, so will yours.

• A discount mortgage – your rate is based on the lender’s SVR minus a set percentage. Your monthly repayment could fall or rise whenever your lender decides to change its rate.

Sticking to a standard variable mortgage rate is typically not the cheapest way to pay off your home loan. And because the interest rate can change at any time, it can make budgeting for your monthly repayments more difficult.

However, SVR mortgages do offer more flexibility than fixed-term deals. For that reason, there may be occasions when an SVR mortgage could be useful - specifically if:

• You’re moving home soon so need a bit of flexibility and don’t want to be hit with an early repayment charge

• You’ve nearly paid off your entire mortgage and the arrangement fees or early repayment charge outweigh the interest savings

• You want the ability to overpay a significant amount, perhaps due to an upcoming lump sum or inheritance

• You're planning on refinancing or releasing equity and need a bit of time to weigh up your options.

You can use our remortgaging calculator to see how much extra it could cost you to move onto an SVR.

The uncertainty of a standard variable rate mortgage can make it hard to budget each month, and they can cost you much more than other types of mortgage.

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