The SVR, or standard variable rate, is the default mortgage interest rate a lender charges once an initial fixed or tracker deal ends. Each lender sets its own SVR and can change it at any time, so it is usually higher than introductory rates.
In one line: The SVR is the lender's fallback rate that a mortgage reverts to when the initial deal period finishes.
How the SVR works
When a fixed or tracker term ends, the balance moves automatically onto the SVR unless the borrower remortgages or takes a new product. The lender decides the SVR independently, though it often moves loosely with the Bank of England base rate.
On a 150,000 GBP balance, a jump from a 4% fixed rate to a 7.5% SVR raises monthly interest considerably. Over a year that 3.5 percentage point gap adds roughly 5,250 GBP in interest before any capital repayment.
Because the SVR can rise without notice tied to base rate, payments on it are less predictable than on a tracker.
The SVR vs a tracker rate
A tracker is contractually pegged to the base rate plus a set margin, so its movements are transparent. The SVR is set at the lender's discretion and can change even when the base rate holds.
Reverting to the SVR is the default outcome of inaction at the end of a deal, not a chosen product.
Primary source: FCA: Mortgages and home finance