What is a variable rate mortgage?
A variable rate mortgage, as the name suggests, is a type of mortgage in which the interest rates can (and usually will) vary over time. They can either go up or down, dependent upon the current strength of the UK economy – rising with inflation and decreasing in times of economic downturn.
Three different types of variable or adjustable rate mortgage are currently available, including:
- Tracker Rate – a mortgage in which the interest rate is determined and moves in line with a fixed economical indicator, such as the official borrowing rate of the Bank of England.
- Standard Variable Rate (SVR) – a mortgage in which interest rates tend to follow the Bank of England borrowing rate, but are largely at the discretion of the individual lender.
- Discount Rate – a mortgage that offers a limited-period discount on the lender’s SVR.
The important thing to note is that, with each of these variable mortgages, the interest rates could significantly and unexpectedly change at any time and they are impossible to predict.
Am I eligible for an SVR claim?
There are a number of circumstances under which a variable rate mortgage could have been mis-sold and, if any of these apply to you, you could be eligible to make a claim against the lender.
For example, when taking out the mortgage, the lender should have made sure that you fully understood the terms of the agreement – highlighting the potential for charges to fluctuate. They should have also outlined how much your repayments could go up or down, assessing how such changes would affect you, your finances, and your quality of life. If they didn’t, your mortgage was mis-sold, and you could be entitled to submit a standard variable rate claim.
Find out more about mis-sold variable rate mortgages and contact our team of experts today. We demonstrate strong experience in this area and we can help to make a claim and get the compensation that you deserve. Either call us on 0800 756 3986 or fill out our online contact form.