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Standard Variable Rate (SVR) refers to the interest rate charged by mortgage providers on their standard mortgage plans. Standard Variable Rate mortgages do not offer fixed or discounted interest rates, but are usually influenced by, and geared to the Bank of England Base Rate and general market trends.
This page takes a more detailed look at Standard Variable Rate Mortgages and explores why you may be paying too much interest if you have a Standard Variable Rate mortgage! We also provide details of our available help on switching your mortgage to a better interest rate!
Table of Contents:
So, what is a Standard Variable Rate Mortgage? Well, Standard Variable Rate (or SVR for short) refers to the interest rate that is charged by mortgage lenders on their standard mortgage plans.
These types of mortgage do not offer fixed rates or discounted rates, instead they are usually influenced by and geared to the Bank of England Base Rate as well as general market trends.
Although both High Street Banks and Building Societies offer Standard Variable Rate Mortgage products, both institutions express the rate in different ways:
Most lenders offer preferential interest rates to new borrowers in order to attract more business. These mortgage schemes take the form of one or a combination of the following features:
Once the preferential period has expired, the mortgage will revert to the lender's Standard Variable Rate (SVR).
So, if your mortgage is currently operating on the lender's SVR, and you are not subject to any extended tie-in where you might incur early repayment charges (ERC), then it's highly likely that you could switch your mortgage to a lender that will offer you a preferential interest rate, or a cash back; thereby possibly saving you thousands of pounds!
Well, consider the following example. Let's say you have a mortgage of £150,000 and your lender is currently charging interest on your mortgage at their Standard Variable Rate of, say 7%. This means that your monthly capital repayment instalment is likely to be about £1061. Now let's assume that another mortgage provider will offer you a fixed interest rate at 5% for the next 3-years. Your monthly repayment would reduce to about £877, a saving of about £184 each month. Take this over the three-year fixed rate term, and you could have amassed a total saving of some £6624 (assuming the SVR had not altered, more if the SVR had increased, and less if the SVR had reduced over the period).
If your present mortgage is currently on your lender's SVR, and you would like to know if you can save money by switching your mortgage, then please call us. We'll take a look at the options available to you and come up with a rapid in-principle decision.
A brief chat with one of our professionally qualified mortgage advisors will quickly put you in the picture. Naturally we'll carefully assess your circumstances, requirements and aspirations. You may even want to discuss borrowing a further amount perhaps to undertake some home improvements, or to refinance some existing borrowings, such as credit cards, other loans or HP.
However, you should always bear in mind that the interest charges are likely to be greater. Although borrowing money against the security of your home will usually be at a cheaper rate of interest than those levied on credit and store cards, HP and personal loans; by extending the term of your borrowing on the remortgage, it is likely that over the longer period of time that you take to repay the new transaction, inevitably you are likely to repay more in interest charged than you would have done if you had paid your borrowings over the initial contractual term.
Usually, yes!
We have a wide range of plans to suit most circumstances in our mortgage and loan portfolios, and we specialise in providing solutions, even in the trickiest of circumstances.
You'll find our service to be professional, friendly, helpful and hopefully an overall pleasant experience! So, please don't hesitate to Contact Us if you would like to discuss your requirements, naturally without obligation!
You'll be able to reach one of our professionally qualified mortgage advisors on Freephone 08000 282 281 everyday (including the weekends) up until 10.00pm. Alternatively, you may prefer to enquire online instead, it takes very little time and is easy to do! In either instance, we'll be delighted to provide you with an in-principle decision - whatever your circumstances. So, get in touch today, we think you'll be glad you did!
So, that wraps up our look at Standard Variable Rate Mortgages, and how it might well be prudent to investigate the possibility of switching from a Standard Variable Rate Mortgage to a different interest rate. Don't forget, you'll find much more mortgage related information throughout the pages of our Mortgage Glossary which we hope you will find useful, and remember we're only ever a mouse click or two or a free call away and would love to hear from you!
The overall cost for comparison is 9.8% APR.
The actual rate available will depend upon your circumstances. Ask for a personalised illustration. APR variable and based on a usual case. Most customers are likely to receive a lower rate or the same rate as our overall cost for comparison rate - learn more about APR.
There are no upfront broker fees.
However, a fee may be charged on successful completion. An indication is that on conforming cases (straightforward applications with no or minimal adverse credit) a fee may be charged of up to 1% of the amount advanced, typically £795 and will depend on your circumstances.
For non-conforming cases (where case research and processing may be more complex due to adverse credit or unusual circumstances), a fee may be charged of up to 3% of the amount advanced, typically £1,995.
THINK CAREFULLY BEFORE
SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED
IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
Adding existing debt to your mortgage will increase the repayment term and overall cost.
Are you worried and becoming stressed because you are having problems getting a mortgage or remortgage? Worry and stress no more! Here at Shire Direct we provide tailor made mortgage solutions to suit you, and can usually help with all kinds of circumstances including...
Remember, we're here to help, and would love to hear from you!
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Shire Direct and Shire Direct Mortgages are trading styles of Shire Processing Centre Limited which is
Authorised and regulated by the Financial Services Authority in respect of regulated mortgage products and general insurances.
Registered No: 302389. Commercial funding and Secured Loans are not regulated by the FSA.
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