Save money by getting off of a Standard Variable Rate mortgage

What is Standard Variable Rate?

Standard Variable Rate, sometimes called a 'revert rate' or 'reversion rate', is the interest rate that your mortgage lender moves your mortgage to when your introductory offer ends. For example, a borrower who took a two-year fixed rate will see their mortgage revert to the standard rate at the end of the product period if they do not take alternate action. The lender will keep the borrower on this rate unless action is taken.

Why is being on a Standard Variable Rate a problem?

In short, mortgage lenders like borrowers to be on this rate as it is very profitable for them and they are in control of the rate.

Our analysis of 63 lenders in today's market shows that a borrower with a mortgage of just £100,000 could save close to £200 per month simply by switching from their lender's standard variable rate to a more competitive mortgage rate.

Save an average of £183 per month against the Standard Variable Rate on your Residential Mortgage

Our table shows Lenders' current standard variable rates and the potential monthly savings available when swapping rates for a borrower with a £100,000 mortgage.

The above figures are intended as a guide only and are based on the current SVR against a new rate of 5.00%. Speak to our team for tailored figures for your own situation.

Save an average of £188 per month against the Standard Variable Rate on your Buy to Let Mortgage

Our next table shows Lenders' current standard variable rates for buy-to-let mortgages.

See the potential monthly savings available when swapping rate for a landlord with a £100,000 mortgage

The above figures are intended as a guide only and are based on the current SVR against a new rate of 5.00%. Speak to our team for tailored figures for your own situation.

Does my lender offer alternative rates?

Your mortgage lender in most cases will contact you before your current special rate ends to offer you alternatives to the standard variable rate. However, since they will only be offering you from their limited range of rates, you cannot be sure that you can get the best deal available on the market from your existing lender. It is recommended, therefore, that you consider the whole of the market when reviewing your mortgage.

What if I don't take up the offer of a new rate from our existing lender?

If you do not arrange a new rate with your existing lender, you will drop onto the standard variable rate. We are all busy people, and often, even with the best intentions, we may forget to make the necessary arrangements to keep our mortgage rate competitive.

Your mortgage lender will generally contact you when your current rate ends to offer alternatives, but the lender is unlikely to contact you again once you have gone on the standard variable rate.

This does not mean that you have missed your chance to move to a more favourable rate as there are no early repayment charges on standard variable rates, this means you can move your mortgage and save money at any time.

Am I on a Standard Variable Rate?

Many borrowers are on standard variable rates. Mortgage industry figures show that every month there is up to £14 Billion of mortgage lending that is coming out of fixed or tracker rates for mortgage borrowers across the country.

If you have been with your mortgage lender for a number of years and do not remember taking any action to move to a new rate you are probably on a standard variable rate.

What are the costs involved in switching mortgage rates?

You can switch to a new rate from a standard variable rate at no cost in a number of ways. Your existing lender may offer a range of rates you can switch to without cost. Other lenders will be keen for your business and will offer 'fees-free' remortgaging with rates more favourable than your lender can offer in some cases.

Can I raise extra money?

Yes, when you remortgage onto a new rate with a new lender, you can raise extra cash to pay off debt, build an extension or improve your home, or put money aside for business reasons, school fees, etc. Your existing lender may also offer you extra cash through what is known as a further advance.

Are there disadvantages to moving from Standard Variable Rate?

There could be disadvantages for some borrowers.

For example, as standard variable rates do not carry early redemption charges, leaving your mortgage on an SVR could be more suitable if you are expecting to repay the mortgage in full in the short term. This also applies if you intend to pay lump sums off of your mortgage or overpay your mortgage.

You should always speak to a qualified mortgage advisor before you take a new mortgage rate.