Update Date: 29th October 2020

There are 2 main types of home loan on the market known as fixed rate and variable rate mortgages. You can get the best variable-rate mortgage by finding the lowest interest rate. However, unlike a fixed rate deal, the rate you get can vary during the term of the mortgage deal.

There are 3 types of variable rate mortgage

  1. 1.

    Tracker mortgages
    Tracker mortgages add a fixed interest rate to an economic indicator such as the Bank of England base rate. As the base rate goes up and down, it will be followed or 'tracked' by your mortgage rate. Tracker mortgage deals usually last for 2 to 5 years.

  2. 2.

    Standard variable rate mortgage (SVR mortgages)
    Each lender will set its own mortgage standard variable rate (SVR) which is typically between 2% and 5% above the base rate. These standard variable rates roughly track the base rate and are used by lenders as the standard mortgage rates for their SVR mortgages.

    This type of mortgage can be very expensive and, importantly, this is the rate most borrowers will be put on automatically, when their mortgage deal ends.

  3. 3.

    Discount variable rate mortgages
    Discount variable mortgages offer a 'discount' off the lender's current standard variable rate for a set period of usually between 2 and 5 years.

    The mortgage variable rate for all of these types of mortgage is therefore able to change during the course of the mortgage term. Speak to a mortgage adviser if you are unsure what mortgage type is right for you.

Variable mortgage rates or fixed rates?

A variable rate deal can change your repayments during its term, potentially causing them to go up or down.

A fixed rate deal will keep your repayments the same for the term you sign up to.

If you would rather know exactly how much your mortgage repayments will be, then a variable interest rate mortgage may not be the best option for you.

You can compare fixed rate mortgages if you want to keep your repayments the same for a set term.

Can you get any current variable mortgage deals?

You can only get a current variable mortgage rate deal that matches your loan to value ratio (LTV). This is the amount you owe on your mortgage divided by the value of your property.

For example, if your mortgage is 150,000, and your property is worth 200,000, your LTV is 75%. This means you will need to look for deals with a maximum LTV of 75%.

How do I get the best variable mortgage rates?

The best variable rate mortgages tend to be offered to borrowers with an LTV of 60% or less. This is because they own a larger proportion of the property, and so pose a lower risk to a lender.

If you are a first time buyer, by offering a larger deposit you could find you can drop to a lower LTV band, which can result in cheaper variable mortgage rates.

If you are remortgaging, your property could have increased in value, which could mean you now fall into a lower LTV band. You can check how much equity you have in your home by getting it professionally valued.

What is the current variable mortgage rate?

You can find the current best variable mortgage rate deals in our table above.

Variable rate mortgage calculator

You can find out how much you can borrow by using our mortgage calculator.

Variable rate mortgage FAQs


What happens when my variable rate mortgage deal ends?


You are automatically moved to your lender's standard variable rate mortgage, meaning your repayments could go up if it is higher than your existing rate.


Can I pay off my variable rate mortgage before the term ends?


Yes, but many variable rate mortgage providers charge you if you repay or switch to a cheaper deal before the term ends. The exception to this is if you are on your lender's standard mortgage rate (SVR mortgage), as you can often pay off your mortgage early or move to a cheaper deal with no penalty.


Will applying for a mortgage affect my credit rating?


Yes, every application you make appears on your credit record, so avoid applying for too many. Here is how your credit record works.


Do I need a good credit record to apply?


No, but it will increase the chances of your mortgage getting accepted. You may find it harder to get a variable rate mortgage with poor credit.

About our mortgage comparison


Who do we include in this comparison?


We include every mortgage in the UK you can apply for directly from the lender. They are all from lenders regulated by the Financial Conduct Authority.

Here is more information about how our website works.


How do we make money from our comparison?


We have commercial agreements with some of the companies in this comparison and get paid commission if we help you take out one of their products or services. Find out more here.

You do not pay any extra and the deal you get is not affected.