Standard variable rate

A lender's standard variable rate is the rate a lender charges its customers on loans – particularly mortgages.

This standard variable rate is the base rate that special deals (i.e. discounted rates, or fixed rates) revert to after the period of the discount or fix expires. The lender's standard variable rate will typically increase and decrease broadly in line with the Bank of England base rate of interest, although this is not necessarily the case.

In most cases, mortgage-holders paying the standard variable rate are almost certainly paying more than they need to for a mortgage. The difference between a lender's standard variable rate and a market-leading rate is normally around two per cent – or hundreds of pounds a year on the repayment costs of an average mortgage.

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