If your fixed rate mortgage deal has ended and you have not switched to a new product, you are almost certainly on your lender's Standard Variable Rate (SVR). This is one of the most expensive ways to pay for your mortgage, and yet thousands of homeowners in Northern Ireland remain on one without realising how much they could save.
What Is an SVR?
A Standard Variable Rate is the default interest rate your lender charges after your initial mortgage deal (fixed, tracker, or discounted rate) expires. Every lender sets its own SVR, and it is almost always significantly higher than the rates available on new mortgage products.
SVRs are influenced by the Bank of England base rate, but lenders have full discretion over their SVR. They can change it at any time, by any amount, and are not obliged to pass on base rate cuts in full.
How Much More Could You Be Paying?
The gap between an SVR and the best available mortgage rates can be substantial. While specific rates change regularly, the difference is often two or more percentage points.
On a typical Northern Ireland mortgage, this difference can translate to hundreds of pounds per month in additional interest. Over a year, that adds up to a significant amount of money that could be put to better use.
Why Do People Stay on an SVR?
Despite the potential savings, many homeowners remain on their lender's SVR. Common reasons include:
- Not realising their deal has ended. When a fixed or tracker deal expires, lenders are not always proactive about alerting you to the change.
- Assuming they cannot switch. Some homeowners believe they are locked in, but once your initial deal period ends, you are free to remortgage without paying early repayment charges.
- Perceived hassle. The thought of going through another mortgage application can feel daunting, but the process is often simpler than the original purchase.
- Changes in circumstances. If your income, employment, or credit situation has changed, you may worry about being declined. However, there are lenders who cater to a wide range of circumstances.
When Should You Switch?
The ideal time to start looking at your options is three to six months before your current deal ends. This gives you enough time to apply for a new deal and have it ready to start as soon as your existing one expires.
If you are already on an SVR, there is no need to wait. You can start the remortgage process immediately, as you will not face early repayment charges.
What Are Your Options?
When you remortgage away from an SVR, you can typically choose from:
- Fixed rate: Lock in a set rate for a defined period (commonly two or five years)
- Tracker: A rate that moves with the base rate
- Discounted variable: A discount off the lender's SVR for a set period
Your choice will depend on your priorities: payment certainty, flexibility, or the lowest possible rate. Our guide to fixed vs variable mortgages covers this in more detail.
How to Switch
- Check your current deal. Confirm you are on the SVR and there are no early repayment charges.
- Get advice. A mortgage broker can search the market for deals suited to your circumstances.
- Apply. The remortgage process is typically straightforward, particularly if you are staying in the same property.
- Complete. Your new lender pays off the old mortgage, and your new deal begins.
Take Action
If you are on an SVR or your current deal is ending soon, it is worth reviewing your options. At CGR Financial, we help homeowners across Northern Ireland find better mortgage deals. Get in touch for a remortgage review.
Your home may be repossessed if you do not keep up repayments on your mortgage.
The information contained within was correct at the time of publication but is subject to change.