What Is Variable Rate Mortgage (SVR)?
A mortgage where the interest rate can change at any time, usually tied to the Bank of England base rate or the lender's SVR.
Definition
A variable rate mortgage has a rate that can move up or down. The most common types in the UK are: Standard Variable Rate (SVR), which is the lender's own reference rate and can change at their discretion; tracker mortgages, which follow the Bank of England base rate at a defined margin (e.g. base rate plus 1%); and discount mortgages, which are set below the SVR for a fixed period. SVRs are typically 2-4 percentage points above the base rate and are the default rate borrowers revert to when a fixed or tracker deal expires. SVRs in 2026 are typically 7-8%. Trackers offer transparency but no payment certainty.
Example
A tracker mortgage at Bank of England base rate plus 1% means if the base rate is 4.5%, you pay 5.5%. If the base rate drops to 4%, your rate falls automatically to 5%.