Five Questions About: Standard variable rate - Mortgages, Money - The Independent

Five Questions About: Standard variable rate - Mortgages, Money - The Independent

What is standard variable rate?

The standard variable rate (SVR) is the mortgage rate usually charged when the fixed or discounted period on your mortgage deal ends. It is set by lenders, with changes at their discretion.

When do SVRs change?

Lenders tend to alter their SVRs after changes in the Bank of England base rate. There is no guarantee that the SVR will move in line, because it is not directly tied to the base rate. When the base rate fell from 5.0% to 0.5% between October 2008 and March 2009, Lloyds TSB/Cheltenham & Gloucester was the only one of the top 20 lenders to reduce its SVR by the full 4.5 percentage points. When it starts to rise again – which many economists believe will happen this year – some banks and building societies may choose to increase their SVR by more than any change in the base rate.

I've heard Halifax is giving money back to some borrowers on SVR. Can you explain? .............