Variable Rate Mortgages Explained

What is a variable rate mortgage?

Variable rate mortgages move up and down, usually in sync with the country’s economy and other factors. It’s usually the basic mortgage a lender will offer after introductory incentives have come to an end. It’s defined by a standard variable rate (SVR) which lenders can move whenever they choose to. This can be influenced by several factors including base rate changes made by the Bank of England and decisions by the mortgage lender. There are also alternative types of variable mortgage such as tracker mortgages and discount rate mortgages.

Pros and cons of variable rate mortgages

Variable rate mortgages are sometimes cheaper than a fixed rate, and there won’t be a repayment charge if you want to switch to a different type of mortgage. If you think rates are going down or will remain low, it’s worth considering. However, it’s a riskier option due to rate fluctuations. It may not be suitable for those who want to know they’re paying the same each month or won’t be able to afford repayments if rates drastically increase. SVR mortgages can alter drastically between lenders, so it’s worth shopping around for the best deal for you.


If your introductory incentive offer such as a tracker mortgage is coming to an end, sometimes it’s not the right choice to switch to a more expensive SVR mortgage. In these cases, remortgaging can be an option to find a better deal elsewhere.

When looking to apply for any type of mortgage, getting professional, impartial advice can help you get the best mortgage product for you. Find a trusted mortgage adviser in your local area here.