A standard variable rate (SVR) mortgage is the typical interest rate that you will be paying on the total amount of money you are borrowing from the lender. It is usually given as a percentage, and differs from an annual percentage rate (APR). An APR includes all costs associated with the loan. For example this could be interest, other fees and any type of insurances required etc.
As interest rates vary quite often, all mortgage lenders will have a standard variable rate. This is the default rate for the mortgages they offer and gives a good indication of what deals they are promoting and if they are competitive with other lenders.
The base rate set by the Bank of England is the biggest factor that affects standard variable rates. In the last few years, mortgage interest rates have been quite low, which has benefited borrowers. With these types of things though, changes could be made at any time and therefore this is something for a borrower to consider.
Many mortgages begin with discounted initial rates but then change to the standard variable rate after a pre set period. These include capped and collared mortgages. When considering mortgages with such rates, you should also take into account what the standard variable rate may be once the pre set period comes to an end. Many mortgages apply certain conditions, which mean that you must remain with them terms for a certain number of years. This can even be when the pre set period is finished. If, during this time that you wish to change lenders, it is more than likely that there will be penalties involved, which you will have to pay before you can change.
