Information about
Variable Rate Mortgages

The interest rate on a Variable Rate Mortgages moves broadly in line with the Bank of England's base rate but it’s usually around 2% to 3% over base rate.

Therefore, your monthly mortgage repayments will decrease if the interest rates fall and increase if interest rates increase. Hence the name Variable Rate Mortgages.

The danger is that you take out a mortgage that you can afford now but could experience difficulty if your monthly repayments increased due to higher interest rates. If this is a concern to you, you should consider a fixed rate mortgage or even a capped rate mortgage. In any case you must seek professional advice.

One of the advantages with a standard Variable Rate Mortgage is that they rarely have early repayment penalties. This means that you can shop around for a better deal at any time.

Most fixed, capped and discount rate mortgages charge the standard variable interest rate once their introductory period has ended.