What are discounted SVR mortgages?

A discounted SVR mortgage is a type of variable rate mortgage where the interest rate is discounted from (or follows) the lender’s Standard Variable Rate (SVR). This means that the interest you are charged on your mortgage depends on how the SVR changes:

When the SVR falls, your interest rate will also fall.

When the SVR rises, your interest rate will also rise.

For some people the flexibility of discounted mortgage rates is an advantage whilst others will prefer the security of knowing what their interest rate will be for a set period of time (fixed rate mortgages). With a discounted SVR mortgage you need to prepare for your interest rate and mortgage payments to go up if the SVR rises.

Is a discounted SVR mortgage right for me?

See how a discounted SVR mortgage could be the right choice for you and what you need to be aware of:

  • Discounted SVR mortgages track the SVR (a variable rate of interest) over a specified period of time.
  •  This means that the interest rate you are charged will rise when the SVR increases and fall if it decreases, affecting your mortgage payments in the same way. 
  • A minimum rate of interest is applied to discount products (‘the collar’) which means that when the SVR falls, the interest rate you pay also falls but won’t go below this minimum rate of interest. 
  • A maximum rate of interest applied to a discount product is called a “cap”. This means that if the SVR increases, the interest rate you pay will not go above this maximum/cap (if one is set on the product). 
  • If you’re interested in a discounted SVR mortgage, you need to make sure you are happy to accept the risk that your mortgage payments would increase in the future if the SVR rises. 
  • You have the right to repay the loan either partially or in full during the term of the loan.
  • Early Repayment Charges and other fees and charges apply.

Alternatives to discounted SVR mortgages


Fix your mortgage interest rate, so it won’t change over a set period of time, regardless of what is happening to interest rates elsewhere.


Use your savings to offset against the balance of your mortgage and reduce the interest you pay.


Mortgages that follow the Bank of England base rate - you could save money while the base rate remains low but your payments could also go up.

You might also be interested in

Call us

Already a member

0345 166 9300*

9am - 5pm: Mon to Fri
9am - 1pm: Sat