Best variable rate mortgage deals

What is a variable rate mortgage?

If you’re thinking about getting a mortgage and want some flexibility, variable rate mortgages might be worth a look. With this type of mortgage, your interest rate can go up or down over time. This means your monthly payments can change too.

There are three main types of variable rate mortgages:

Standard variable rate (SVR) – This is the rate you normally move onto when your initial mortgage deal ends. It’s usually higher than other rates, but there are often no early repayment charges (ERCs) if you want to clear your mortgage early.

Tracker mortgage – This one follows an external rate, normally the Bank of England base rate, plus a set percentage. If the base rate goes up, your mortgage rate and monthly payments go up too. If it drops, you’ll pay less.

Discounted mortgage – With this, you get a discount off your lender’s SVR for a set period. Your payments can still go up or down, but it all depends on what your lender decides to do with their SVR.

The main difference between fixed and variable rate mortgages is certainty. Fixed deals give you set monthly payments. With variable rates, your payments can change – which can be good or bad, depending on what happens with interest rates.

Find the best variable rate mortgage

If you’re searching for the best variable mortgage rates, our advisers can help you find the most competitive deals. We work with over 90 lenders and can compare options to find the right one for your needs.

To get started, check out our best variable mortgage rate table, which shows the lowest rate available today. You can also start your online application to see which mortgages you qualify for.

Apply for a variable rate mortgage with L&C

If you’re leaning towards a variable rate mortgage, we’re here to help you find a deal that suits you.

Why choose a variable rate mortgage?

One of the big pluses with variable rates is that the starting interest rate is often lower than fixed rate options. You might also be able to make larger overpayments without facing penalties, which could help you pay off your mortgage quicker and reduce the total interest you pay.

This can be a good fit if you’re a high earner or have some savings you’d like to use to reduce your mortgage faster.

The downside is that your payments can change. If budgeting is important to you or you’re worried about rising interest rates, a fixed rate might be a safer bet.

How variable rate mortgages work

With variable rate mortgages, it’s important to understand that your monthly repayments can change at any time. Lenders will usually give you notice if they’re going to change the rate.

If you’re on a tracker mortgage, your payments will rise or fall in line with the Bank of England base rate. This normally happens the month after a base rate change.

If you’re on a discounted deal or your lender’s SVR, your payments are controlled by the lender. These rates don’t always follow the base rate directly – your lender can raise or lower them whenever they choose.

You may be able to switch to a new mortgage deal without having to pay any ERCs, especially if you’re on an SVR. This can be helpful if you find a better deal elsewhere.

Who can get a variable rate mortgage?

To get the best variable rate mortgage deals, you’ll need to meet your lender’s eligibility checks. They’ll want to know that you can afford your repayments – not just now, but if rates go up too.

This usually means sharing:

• 3–6 months of payslips
• Recent bank statements
• Details of your outgoings
• Your credit history
• Information about your deposit or equity

If you're self-employed, you'll also need to provide tax returns or business accounts.

How to find the best variable rate mortgage deals

Start by getting your finances in order. Check your credit report with Experian, Equifax or TransUnion to make sure everything’s correct. Fixing any mistakes now can boost your chances of getting the best deal.

Once you’re ready, use our online mortgage finder to see the top variable rate mortgage deals available right now. We work with over 90 lenders and can compare a wide range of offers to find the one that suits you best.

You can apply online or chat with one of our expert advisers, who’ll guide you through the whole mortgage process from start to finish.

Making repayments on a variable rate mortgage

Your repayments will change depending on your interest rate. If the rate goes up, your monthly payment goes up too. If it drops, you’ll payless. Your lender will keep you informed if there’s a change.

The good news is that if you’re on a standard variable rate mortgage, you might be able to make overpayments or repay your mortgage early without any fees. But if you’re on a tracker or discounted deal, check first – some of these do come with ERCs.