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Variable Rate Mortgages

At Deedle Finance, we secure the most competitive mortgage rates for all types of borrowers. Our committed team focuses on comprehending your individual requirements to secure the best available deals.

Our mortgage advisors invest time in understanding your requirements and financial situation to provide you with the best variable rate mortgages available in the market, completely free of charge.

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How To Get A Variable Rate Mortgages

Step 1
Complete Deedle's Form
Enter key details on our online form including your name, contact information and requirements.
Step 2
Get A Callback
Once you submit the online form, our experienced advisors will promptly reach out to you, offering their guidance and support throughout the entire mortgage process.
Step 3
Check If You Qualify
Our advisors will request important information, including your annual income, to evaluate your borrowing capacity and identify the most suitable interest rates for your mortgage.
Step 4
Receive Your Variable Rate Mortgage
Once we have found a loan to suit your borrowing requirements, our advisers can submit your mortgage application and help you get on the property ladder ASAP!
What-Is-a-Variable-Rate-Mortgage

What Is a Variable Rate Mortgage?

A variable rate mortgage is a type of home loan where the interest rate can fluctuate over time. Unlike a fixed rate mortgage, where the interest rate remains constant for the entire loan term, a variable rate mortgage is subject to changes based on various factors, such as market conditions or an external benchmark rate like the Bank of England base rate.

With a variable rate mortgage, your monthly mortgage payments can increase or decrease as the interest rate changes. This means that the amount you pay towards interest and principal can vary throughout the life of the loan. The specific rate adjustments and frequency of changes will depend on the terms of the mortgage agreement.

How Do I Qualify for a Variable Rate Mortgage?

Lenders will assess several factors to determine your eligibility and the terms they can offer you. These include the following:

  • Creditworthiness
  • Income and employment
  • Debt-to-income ratio
  • Down payment
  • Guarantor
  • Affordability of property
How-Do-I-Qualify-for-a-Variable-Rate-Mortgage

What Are the Advantages of a Variable Rate Mortgage?

  • Potentially Lower Initial Rate: Variable rate mortgages often start with a lower interest rate compared to fixed rate mortgages.
  • Opportunity for Interest Rate Decreases: With a variable rate mortgage, your interest rate can decrease if the benchmark rate, such as the Bank of England base rate, goes down.
  • Flexibility: Variable rate mortgages often come with more flexible features. They may allow you to make extra repayments or pay off your mortgage early without incurring significant penalties.
  • Potential for Long-Term Savings: Although variable rates can increase, if interest rates remain stable or decrease over the long term, you could potentially save money compared to a fixed rate mortgage.
  • Potential to Benefit from Economic Conditions: If the economy is performing well and interest rates are expected to remain stable or decrease, a variable rate mortgage can work in your favour.

What Are the Disadvantages of a Variable Rate Mortgage?

  • Fluctuation: With a variable rate mortgage, your monthly payments can fluctuate over time as interest rates change, making them unpredictable.
  • Risk of Interest Rate Increases: Variable rate mortgages are susceptible to interest rate increases, which can lead to higher monthly payments.
  • Potential Higher Long-Term Costs: While variable rates may start lower than fixed rates, there is the risk that interest rates could rise over time.
  • Limited Rate Stability: Unlike fixed rate mortgages, which offer rate stability for a specific period, variable rate mortgages can experience frequent rate adjustments.
  • Hard to Budget: Since the monthly payments can change, it can be more challenging to budget and plan for other financial goals.

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Should I Get A Variable Rate Mortgage Through a Broker?

Yes, it is highly recommended to work with a mortgage broker when seeking a mortgage. Brokers have access to exclusive deals and can secure the best rates from lenders.

At Deedle, our dedicated team of mortgage advisors is committed to supporting you throughout the entire mortgage process. We handle paperwork, communicate with lenders on your behalf, and ensure a smooth and hassle-free experience, all for free.

No matter your credit history, self-employment status, or retirement situation, our expert team is here to help you find a mortgage that suits your unique needs. With our extensive industry experience, we thoroughly search through a wide range of mortgage deals to identify the perfect fit for your specific circumstances and preferences. Trust us to save you time, alleviate stress, and make the mortgage process seamless.

Types of Variable Rate Mortgage

Standard Variable Rate Mortgage (SVR)

The SVR is the default rate that lenders typically move borrowers onto after any introductory deal ends. The lender determines when the rate changes. SVR mortgages tend to be more expensive than other rates, so it may be worth considering switching to a new deal when your introductory period ends.

Discounted Rate Mortgage

With a discounted rate mortgage, you receive a discount from the lender’s SVR for a specific period. For example, if the SVR is 4.5% and the discount is 1.75%, your payable rate would be 2.75% during the discounted period. The exact amount you pay each month can fluctuate as the lender adjusts the rate in line with their SVR.

Tracker Rate Mortgage

A tracker mortgage follows the movements of an external interest rate, often the Bank of England base rate, plus a set percentage. This means that your monthly repayments will rise or fall in line with changes to the tracked rate. Some tracker mortgages have a “floor” or interest rate collar, meaning the rate won’t go below a certain level, even if the tracked rate drops below it.

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Can I Switch From a Variable Rate Mortgage to a Fixed Rate Mortgage?

Yes, it is generally possible to switch from a variable rate mortgage to a fixed rate mortgage, but this is often associated with things like early repayment charges or administrative fees.

Switching from a variable rate to a fixed rate mortgage can provide you with the security of knowing that your interest rate and monthly payments will remain consistent for a set period, regardless of any fluctuations in the market, if this is something you value.

How Often Do Variable Rate Mortgages Adjust?

Variable rate mortgages can have different adjustment periods, depending on the terms of the mortgage agreement. Common adjustment periods include:

  • Annual adjustment: The interest rate is adjusted once a year, typically on the anniversary date of the mortgage.
  • Semi-annual adjustment: The interest rate is adjusted twice a year, typically every six months.
  • Quarterly adjustment: The interest rate is adjusted every three months.
  • Monthly adjustment: The interest rate is adjusted monthly.

Frequently Asked Questions About Variable Rate Mortgages

What Factors Affect the Interest Rate on a Variable Rate Mortgage?

Variable rate mortgages are tied to a benchmark rate, such as the Bank of England base rate. Changes in the benchmark rate will directly impact the interest rate on your mortgage.

Lenders typically add a margin to the benchmark rate. This margin is determined by the lender and can vary from one lender to another. A higher margin will result in a higher interest rate on your mortgage.

On top of that, economic factors such as inflation, economic growth, and monetary policy can influence interest rates in the broader market.

Can I Make Extra Payments or Pay off a Variable Rate Mortgage Early?

Yes! Most variable rate mortgages allow for additional payments and early repayment without incurring significant penalties. However, the specific terms and conditions regarding extra payments and early repayment vary among lenders and mortgage products.

Where Can I Get a Variable Rate Mortgage?

Deedle can help you find variable rate mortgages all across the UK, including:

London, Birmingham, Manchester, Leeds, Glasgow, Newcastle, Bristol, Edinburgh, Cardiff, Belfast, Sheffield, Nottingham, Southampton, Liverpool, Aberdeen, Plymouth, Oxford, Cambridge, York, and Norwich.

Can the Government Help Me Get a Variable Rate Mortgage?

Yes, the UK has some schemes that can help buyers to afford a home. For example, the Mortgage Guarantee Scheme will be extended by a year to the end of December 2023.

Can I Switch Lenders During My Variable Rate Term?

Yes, it is generally possible to switch lenders during your variable rate term. Switching lenders is known as remortgaging, and it involves paying off your existing mortgage with a new one from a different lender.

Deedle Finance is the trading name of Tudor Lodge Digital Ltd which trades under company number: 10437769.

Deedle Finance does not provide advice on regulated mortgage contracts or credit agreements, these are carried out by one of our independent FCA regulated associates. 

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENT ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

IF YOU ARE THINKING OF CONSOLIDATING EXISTING BORROWING YOU SHOULD BE AWARE THAT YOU MAY BE EXTENDING THE TERMS OF THE DEBT AND INCREASING THE TOTAL AMOUNT YOU REPAY.

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