Standard Variable Rate explained

Quick summary:

• A Standard Variable Rate is a lender’s default interest rate. You’ll typically be moved onto it when your initial mortgage deal, like a fixed or tracker rate, finishes 

• SVRs are variable, which means your lender can change the interest rate at any time. This can make budgeting more unpredictable as your monthly payments can go up or down 

• The SVR is usually more expensive than other available mortgage deals so it usually makes sense to switch

• The main advantage of sticking with your lender’s SVR is flexibility - you can usually overpay or switch to a new deal when you’re ready without facing any early repayment charges

What is the Standard Variable Rate? 

A Standard Variable Rate (SVR), is a mortgage interest rate set directly by your lender (typically a bank or building society). Think of it as your lender’s default rate.

When your introductory mortgage deal, such as a two or five-year fixed rate, comes to an end, you’ll automatically be moved onto your lender’s SVR. But you also have the option to find a new deal, either by remortgaging with a new lender or sticking with your current one (this is known as a product transfer). 

As the SVR is usually more expensive than other rates available, most homeowners tend to lock in a new deal before their current one comes to an end to avoid automatically moving to their lender’s SVR. 

Looking to find out more about different interest rate types? Check out our guide on fixed versus variable rate mortgages.

How does a Standard Variable Rate work?

Every lender sets their own Standard Variable Rate, and they can change it whenever they like. While the rate is influenced by factors like the Bank of England base rate, it doesn’t track it directly. Other factors such as market conditions, economic outlook or the lender’s own business strategy can influence how the lender sets their SVR. 

This means that your monthly mortgage payments can change whenever your lender decides to alter its SVR, which can make managing your monthly outgoings a bit trickier. 

When is it a good idea to move onto a lender’s Standard Variable Rate? 

Sticking with your lender’s SVR won’t be the right move for most people, but it can make sense in a few specific situations. The main advantage of an SVR is the extra flexibility. 

A lender’s SVR doesn’t have a specific end date, and there are often no early repayment charges. This means you’ll usually be able to make as many overpayments as you like, pay off your mortgage entirely, or switch deals when you’re ready without penalty. 

You might, therefore, consider staying on your lender’s SVR if:

• You’re moving house soon. This will allow you to pay off your existing mortgage and choose a new deal without facing early repayment charges. 

• You have a small mortgage balance. If you’re planning to pay off your mortgage, the cost of product fees for a new deal could outweigh the savings you’d get from selecting a lower interest rate deal. 

• You’re planning to make significant overpayments. If you’re expecting a windfall, such as inheritance, and plan to pay off much more than your usual monthly repayments in the near future, you may wish to stay on your lender’s SVR for now. You can always look to switch to a new deal once you’re no longer planning to overpay by more than your lender’s annual limit (usually 10%).

• Your circumstances have changed. If you’re struggling to find or lock in a suitable mortgage deal, you may wish to stay on the SVR in the short-term until you’re in a better position to apply for a new one.

Remember, even if a SVR feels like a good option for you, your monthly payments could rise at any time if your lender decides to increase their SVR. You’ll need to be confident you can comfortably afford an increase in your mortgage payments to avoid putting unnecessary stress on your finances. 

Disadvantages of moving to the Standard Variable Rate

• More expensive. SVRs are usually around 2-3% higher than other initial rates, so you could end up paying hundreds or even thousands of pounds more each year. 

• Unpredictable payments. Your lender can change their SVR at any time. If the SVR increases, your monthly payments will rise, which can be tough to budget for.

How much could I save by remortgaging onto a new rate? 

There are often much more competitive deals available compared to a SVR, so the savings can be substantial. 

In October 2025, the average SVR was 7.60%, while the average 2-year and 5-year fixed-rate mortgage rates for a 75% loan-to-value mortgage were substantially lower at 4.75% and 4.98% respectively.

Let’s look at how this would impact the mortgage of an average-priced home of £269,735, assuming a loan-to-value ratio of 75% and a mortgage term of 25 years. 

*Accurate at the time of writing on 9 October 2025. The figures in this table are the average mortgage rates for various products across the market. The actual rate you are offered and your monthly payments will depend on your personal circumstances.

As you can see, remortgaging from the average SVR to an average 2-year fixed rate could save you £473 every month. That’s a saving of over £5,676 a year. Moving to a 5-year fix could save you £437 every month (£5,244 a year). 

If you’re currently sticking to your lender’s SVR because finding the right mortgage deal feels too overwhelming, get in touch. We can handle the hassle for you. 

Current lender Standard Variable Rates

*Accurate at the time of writing, 24 September 2025

*All data taken from Mojo Mortgages own internal records, accurate as of 9 October 2025