Standard Variable Rate - SVR
This is the interest rate charged by the mortgage provider when an initial fixed or tracker rate period comes to an end.
Each provider sets its own SVR. This is the default interest rate that you will be charged if you do not remortgage.
SVRs tend to be much higher than the rates on other types of mortgage.
A fixed rate mortgage has an interest rate that can be set for a period of time. This could be up to ten years.
Your interest rate will not change. You can be sure your repayments will stay the same throughout the mortgage period.
The risk is that if interest rates fall and you want to move to a better deal, you could be charged if you choose to exit the mortgage deal before the end of the term.
Discounted variable rate
This sets the interest rate you pay below a specific lender’s SVR for an agreed period. For example, 2.74% below the SVR of 5.74%.
The interest rate is not fixed. It could rise or fall if the lender decides to change their SVR.
The discounted variable rate will not change during the agreed period with the lender.