One of the critical features of your mortgage is the rate at which you pay interest on the loan. The rate can vary widely – and, in so doing, make the difference between a mortgage payment where you are having to spend or are able to save many thousands of pounds over the life of the mortgage.
Mortgage interest rates are determined in several different ways and probably the most common is the so-called standard variable rate. What does the term mean and is it likely to be the appropriate mortgage for your own needs and financial situation?What is a standard variable rate mortgage?
A standard variable rate mortgage provides the basic model on which mortgage lenders advance their loans. Some people may refer to it as an adjustable rate mortgage.
It is a standard rate because that is the baseline to which the lender’s practices will always return in the absence of some other rate of interest – it is their default rate of interest, in other wor…