Variable rate mortgages

The Standard Variable Rate is the lender's basic rate - usually tied in to the Bank of England's base rate. The rate reflects general market trends, and fluctuates according to economic conditions. Most mortgages revert to this rate after the initial special offer rate has expired.

Pros:

• This type of mortgage is usually free of restrictive clauses and penalties
• Can offer more flexibility, and less future commitment
• If the base rate falls, you could save money on repayments

Cons:

• Usually a higher rate than other 'special offer' mortgages
• Although the rate changes to reflect market conditions, there can be a delay before you see any change in your repayments
• If interest rates rise, you will be liable to pay more