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Standard Variable Rate Mortgage
A standard variable rate mortgage loan, is a mortgage where the interest rates vary depending on market conditions. Changes in base rates with the European Central Bank (ECB) will usually lead to changes in the standard variable rate, but the lenders can also increase or decrease the rate at their discretion.
PROS of a standard variable rate mortgage:
- You can pay off the mortgage early with no early repayment penalties
- You can make extra regular or lump sum payments to reduce the balance, and reduce the overall interest you'll pay.
- Variable rates are typically (but not always) cheaper than new business fixed rates.
- Typically, you'll get a discount on the rate for the first year.
CONS of a discount rate mortgage:
- The lenders can change rates whenever they want to.
Alternatives mortgage rates to consider:
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