Variable Mortgages

Variable rate mortgage repayments vary according to the interest rate fluctuations as defined by London Inter Bank Offered Rate; this is interest rates that London Banks lend to one another.

This is the rate that most mortgages would revert to after a fixed, tracker mortgage product has expired. The lender would often offer the customer another deal to retain the customer but some simply choose to remain on the standard variable rate as often new products incur further fees such as arrangement or product fees, where as remaining on the standard variable rate mortgage would not.

Variable rate mortgages can be selected on an interest only or a repayment basis. The rate of interest for a variable mortgage is determined by the lender. If the interest rate changes so does the variable rate, but unlike the tracker mortgage the lender does not have to inform the borrower of the change in the interest rate.