What Happens If You Slip Onto the Standard Variable Rate
Slipped onto your lender’s Standard Variable Rate? Discover what it means, why it costs more, and how to move back to a better deal.
Your fixed or tracker deal has ended, and without realising, your mortgage has switched to the Standard Variable Rate (SVR). Suddenly, your monthly payments increase, and the rate feels unpredictable.
This situation is common, but it is rarely the best place to be. Here is what happens when you slip onto the SVR and what you can do about it.
What the Standard Variable Rate is
The SVR is your lender’s default rate. When your fixed or tracker deal ends, you are automatically moved onto it unless you arrange a new deal. It has no fixed term, and the lender can change it at any time.
Why the SVR is usually more expensive
Most SVRs are higher than fixed or tracker deals available on the market. That means higher monthly payments for the same mortgage balance. Over time, this adds up to thousands in extra interest.
How the SVR can change at any time
The SVR is not directly tied to the Bank of England base rate, but it is influenced by it. Your lender decides when and by how much to change the SVR. That makes it unpredictable and hard to budget around.
The impact on your monthly payments
Even a small rise in interest can significantly increase your monthly payment. For example, a £150,000 mortgage at 3% costs around £710 a month. At 6%, that jumps to around £965 — an extra £255 every month.
When staying on the SVR can make sense
In rare cases, the SVR could be competitive or flexible if you plan to move or pay off your mortgage soon. But for most people, the SVR is a costly safety net rather than a smart long-term option.
How to move off the SVR
The best way to avoid paying more than you need to is to remortgage. You can switch to a new deal with your current lender or move to a different one. Starting the process three to six months before your deal ends avoids slipping onto the SVR in the first place.
The Bottom Line
Slipping onto the Standard Variable Rate is easy but expensive. By reviewing your mortgage early, you can protect yourself from rising payments and move onto a deal that works better for you.
Your home may be repossessed if you do not keep up repayments on your mortgage or other loan secured against it.
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It is the lender’s default rate that you move onto when your fixed or tracker deal ends.
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Almost always. Most SVRs are more expensive than fixed or tracker products.
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Yes. You can move onto a new deal at any time to reduce your payments.
