Variable Rate Mortgage
Variable Rate Mortgage
A variable rate mortgage is based on the lender’s standard variable rate (SVR). This is a rate that is set typically around 2% above the Bank of England base rate. Therefore the interest payments are likely to rise and fall depending on the base rate (now officially called the bank rate) set by the Bank of England which happens once a month.
However, the bank rate is currently set at an all time low of 0.5% and all lenders are not keeping to the 2% trend with rates in some cases 5% or more above the bank rate.
The variable rate mortgages sub-prime lenders offer to borrowers with a poor credit history typically have a much higher SVR.
Typically this type of mortgage is the default type of mortgage a borrower would have if they are not in any kind of deal of specific type of mortgage.
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