The pros and cons of a standard variable rate mortgage

Do you have a standard variable rate (SVR) mortgage? There are millions of UK borrowers who do, whether that’s out of personal choice or because their fixed discount rate came to an end (and they were moved to an SVR by default). Either way, it’s important to know the pros and cons of your mortgage product and you need to make sure that you’re not being over-charged.

In the following blog, we put standard variable rate mortgages under the spotlight – highlighting their main advantages and disadvantages and exploring the potential for SVR mortgage claims.

The benefits of an SVR mortgage


One of the main benefits of a standard variable rate mortgage is that, typically, they have no early repayment charges. This means that you are free to overpay or completely pay off your mortgage (if you so wish) and you can switch to a new deal at any time, without having to pay expensive fees.


No product fee

Unlike many of the fixed and tracker rate mortgage products currently available, SVR mortgages tend to have a low arrangement fee. In some cases, there will be no arrangement or product fee at all – which means, in the short-term, they are a much more affordable and attainable option.


Possibility of low-interest rates

Standard variable interest rates usually mirror the borrowing rate of the Bank of England; therefore, if the borrowing rate falls, you could potentially benefit from low monthly mortgage repayments.


Drawbacks of an SVR mortgage


Generally speaking, SVR mortgages are much more expensive than other products on the market (e.g. tracker and fixed rate mortgages) and you could be paying more than you need to each month.



SVR mortgages are a bit of risk. Interest rates continuously fluctuate, they are just as likely to go up as they are to go down – and if they change dramatically, this can lead to overly-expensive (and sometimes unaffordable) monthly repayments. It’s also important to bear in mind, even if the borrowing rate was to fall, this doesn’t necessarily mean that you will benefit. This decision is at the sole discretion of your lender and there is no guarantee that they will reward their customers.


Risk of being overcharged

Over the last few years, it has come to light that many people with a standard variable rate mortgage have been overcharged. Despite a reduction in borrowing rates, SVRs have been kept at a constant level or have even increased without any justification.

In some cases, lenders have also refused requests to switch to a cheaper fixed-rate deal or have charged customers over the odds to make this move.

Mortgage solicitor

Could you be eligible to make an SVR mortgage claim?


Standard variable rate mortgages come with both advantages and disadvantages. They may well be the best option for you; however, it’s always worth doing a little research into the market.

If you have you an SVR mortgage and you think you may have been overcharged, it may also be worth getting in touch with our team of experts – here at Mis-Sold Mortgages. They demonstrate a wealth of knowledge and experience in this area and can offer both tailored advice guidance on your SVR mortgage claims process and whether you are entitled to compensation.

Simply call us today on 0800 756 3986 or fill our out online enquiry form to get what you deserve!

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