Compare Variable Rate Mortgages across the whole market

Considering a variable rate mortgage?

Compare variable rate mortgages using the Totally Money comparison tool to find the most competitive variable rate mortgage available for your circumstances. 

A variable rate mortgage is a mortgage that has a fluctuating Annual Percentage Rating (APR) as opposed to a fixed interest rate, as with a fixed rate mortgage.  Usually referred to as the lender’s standard variable rate, this interest rate follows the Bank of England base rate, and is usually set 1-2% higher than the BoE rate.  When interest rates are raised or lowered by the BoE base rate, lenders adjust their standard variable rate in accordance.

Borrowers do not usually choose to take out their mortgages at the lender’s standard variable rate; instead, this is the rate that most mortgages revert to after the mortgage’s initial discount rate ends. 

Many lenders remortgage at the end of their discounted interest rate period in order to avoid their repayments increasing in the event of interest rate rises, as a variable mortgage rate can be a very expensive way to borrow, particularly during periods of high interest rates.  It is also much more difficult to manage a budget on a variable rate mortgage, as an increase of even a fraction of a percentage on interest rates can add large amounts to monthly repayments.  Therefore, if your finances are already stretched to the top of your budget and there is very little breathing space on your repayments, you may find that a fixed rate mortgage is a better option for you rather than a variable rate mortgage.

If you are considering a variable rate mortgage, it is important to not just compare interest rates between lenders, but to take into account all the set-up fees and upfront charges payable on the mortgage.  It is also very important to ensure you are comparing like-for-like regarding mortgage length, lock-in periods and early repayment charges in case you choose to remortgage.  You should also check how the interest is calculated, particularly if you wish to make overpayments throughout the mortgage term.  If interest is figured monthly and an overpayment is made, it may take another month before interest is recalculated on the reduced amount, meaning you have been paying interest on a larger amount than is actually outstanding.  Many lenders figure interest daily, which means you will instantly see the effects of an overpayment, which over the life of a 25 year mortgage can mean a saving of thousands of pounds.

If you wish to compare variable rate mortgages, complete the form on this page in order to receive expert advice on the best mortgage options available for your budget and requirements.