A mortgage is a loan secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
Elevate is a London-based financial services company committed to helping clients get the most out of their money. Our mortgage brokers team is based in Bromley and Beckenham, helping clients across London. Our services include mortgage advice for individuals, families, commercial businesses and self-employed workers. We can assist in sourcing and securing the best Standard Variable Rate mortgages within our mortgage advice service.
A Standard Variable Rate mortgage can be confusing to buyers, especially when combined with an introductory fixed-rate period. Nevertheless, an SVR mortgage might be the best type of mortgage deal for your family.
What Is a Standard Variable Rate Mortgage?
A Standard Variable Rate mortgage, also known as an SVR mortgage, is a type of mortgage where the rate of interest you pay can go up or down depending on the Bank of England’s base rate. If the base rate changes, the mortgage advisor can account for the change by charging you more or less. The mortgage provider may not change the rate of interest even if the base rate does because the lender gets the final say.
Some families might take out a fixed-rate mortgage or a type of discounted deal for a set period before the mortgage changes to an SVR mortgage.
It can be difficult to know if an SVR mortgage is the most advantageous mortgage type for you, especially if it includes a discounted period. Elevate professionals will analyse and compare different mortgages, so you don’t get caught out!
Advantages and Disadvantages of an SVR Mortgage
Like all mortgage types, an SVR mortgage comes with pros and cons. Here are the most common:
Pros:
- Usually includes an option for early repayment
- SVR mortgage arrangement fees are typically lower
- Your mortgage repayments could become cheaper
Cons:
- Your mortgage repayments could increase
- Usually more expensive than other mortgages types (not always!)
Standard Variable Rate Mortgage FAQs
How are SVR rates determined?
Standard Variable Rate mortgages are determined by the Bank of England’s base rate. Your mortgage provider will adjust the amount of interest you pay when the base rate changes. This could mean you pay more or less.
What is the base rate?
The base rate is a term used to describe the interest that the Bank of England (or any other central bank) will charge UK banks for loans. If this is the rate of interest that the bank must pay to the bank of England, they charge you the same in a Standard Variable Mortgage.
Can I switch?
You can often switch from an SVR mortgage to a fixed deal to save money. But on some occasions, an SVR mortgage can be cheaper than other mortgage types depending on the base rate. You should speak with a mortgage advisor for guidance.
Why Use an Advisor to Find the Best SVR Mortgage Deals?
Standard Variable Rate mortgages can be confusing, especially when they come with an initial discounted repayment period. Using a mortgage advisor to analyse your SVR options and compare them with alternative mortgage types is a sensible way to prevent you from paying more. The best mortgage advisors will search the whole of the market to make sure you get the best deal.
Elevate operates a whole-of-the-market service, ensuring you find out if an SVR mortgage is the best and cheapest mortgage available for you. Chat with our experts to learn more!
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