Standard Variable Rate Mortgages

Standard Variable Rate Mortgages
Following the​ increase in​ interest rates on​ 5 July by 0.25% it​ is​ widely expected that most lenders will increase their standard variable mortgage rate by at​ least the​ same amount and indeed some have already done so .​
But what is​ a​ standard variable rate (svr) and how does it​ affect you?
The svr is​ typically the​ rate of​ interest that you​ would be charged by a​ lender if​ you​ were not on​ a​ special deal .​
The rate of​ interest varies and normally moves up and down in​ line with movements in​ the​ Bank of​ England base rate .​
This means that if​ you​ have a​ mortgage which is​ based on​ a​ svr your mortgage payments will fluctuate from time to​ time .​
However,​ if​ you​ took out a​ two- year fixed rate mortgage this is,​ by definition,​ not the​ lender’s standard variable rate .​
The fixed rate will apply for the​ two year period and after that the​ lender would normally charge you​ their standard variable rate.
Most people would normally then be better off if​ they could get another special deal .​
At the​ time of​ writing (10 July 2018) standard variable rates are moving to​ in​ excess of​ 7.5% whereas you​ can still get fixed rate mortgages at​ less than 7.0%.
Many people are on​ svr mortgages because they have simply never thought to​ re-mortgage .​
They have not looked to​ see whether the​ lender that gave them the​ good deal two,​ three or​ five years ago is​ still giving them a​ good deal now that they are not on​ the​ rate they originally got.
The simple way to​ check that you​ are still getting a​ good deal is​ to​ use a​ mortgage comparison site .​
This will show you​ what the​ best deal available happens to​ be – it​ is​ better to​ check this than to​ just hope that it​ is​ the​ current mortgage that you​ have.
Standard Variable Rate Mortgages Standard Variable Rate Mortgages Reviewed by Henda Yesti on July 04, 2018 Rating: 5

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