A mortgage is a loan secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
A Standard Variable Rate mortgage can be confusing to property buyers, especially if it is combined with an introductory fixed-rate period. Nevertheless, an SVR mortgage might be the best type of mortgage deal for you and your family.
Elevate is a London-based financial adviser committed to helping clients get the most out of their money. Our mortgage broker team is based in Bromley and Beckenham, assisting 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.
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. The fluctuations are usually affected by the Bank of England’s base rate but are not directly linked to it like in a Tracker mortgage. If the base rate changes, the mortgage lender can account for the change by charging you more or less; however, the mortgage provider may not change the interest rate even if the base rate does because the lender gets the final say.
Some people 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. Our team will analyse and compare different mortgages, so you have all the facts you need to decide.
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 mortgage types (not always!)
HOW CAN ELEVATE HELP?
How SVR Mortgages Work: a Standard Variable Rate mortgage can be a flexible option for property buyers. Our mortgage advisers can explain how an SVR mortgage works, including the factors that can cause the interest rate to increase or decrease and how this can affect your mortgage repayments.
Comparing SVR Mortgages to Other Types: While an SVR mortgage may be suitable for some buyers, other mortgage types may be more advantageous depending on your circumstances. Our mortgage advisers can compare SVR mortgages to different types of mortgages, such as fixed-rate and tracker mortgages, to help you understand which one is best for you.
Remortgaging from an SVR Mortgage: If you currently have an SVR mortgage, it may be possible to remortgage to a more favourable rate. Our mortgage advisers can provide guidance on when to consider remortgaging, how to find a better rate, and how to switch to a new mortgage.
Early Repayment Options: One advantage of an SVR mortgage is the option for early repayment. Our mortgage advisers can explain how early repayment works, including any fees or charges that may apply. We can also provide guidance on how to pay off your mortgage early and reduce your overall interest payments.
STANDARD VARIABLE RATE MORTGAGE FAQS
How are SVR rates determined?
The lender determines the actual interest rate in a Standard Variable Rate mortgage. It will be some percentage above the bank rate. Your mortgage provider may 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 Bank of England base rate is the interest rate that the Bank of England charges other banks and lenders when they borrow money from it. It is one of the most important interest rates in the UK, and it significantly impacts the cost of borrowing money for everyone, including people with SVR mortgages.
When the Bank of England base rate goes up, it means it is more expensive for banks to borrow money. This means they will typically charge their customers more interest on loans, including mortgages. So, if you have an SVR mortgage, your monthly payments may increase when the base rate increases.
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 adviser for guidance.
WHY USE AN ADVISER 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 adviser 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 advisers will search the whole of the market to make sure you get the best deal.
At Elevate, we operate a whole-of-the-market service designed to help you find the best and cheapest mortgage available to meet your needs.
CONTACT US FOR MORTGAGE ADVICE
Whether you're a first-time buyer or a seasoned property investor, our team of experts can personally assess your financial situation and help you determine if an SVR (Standard Variable Rate) mortgage is the right choice for you.
If you're a property buyer looking for friendly and professional mortgage advice, look no further than our experienced mortgage broker team based in Bromley and Beckenham.
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