UK standard variable rate mortgage...

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Opting for a standard variable rate mortgage will have some advantages

The main advantage of standard variable rates is that they tend to be flexible with no early repayment charges and the monthly cost will reduce if interest rates drop.

As professional advisors, however, we rarely recommend these products to our clients as they are by no means as cheap in the short term as discounted rate mortgages. With standard variable rates and discounted rates, if interest rates rise the cost of your mortgage will also increase.

The variable rate is controlled by the lender, so although it will vary in line with economic conditions it is not directly tied to the Bank of England Base Rate in the way that tracker rate mortgages are.

If initially you opt for a fixed, tracker or discount rate, generally your lender will transfer you onto their variable rate when your initial deal expires, and unless you have extended tie-ins it often makes sense to shop around at this point to see if there is a cheaper deal available to you.