The interest rate used here is the lender’s default rate, their Standard Variable Rate (SVR). As the name suggests, the rate applied can change at any time, meaning that your monthly repayments could do so too.
With this type of product there isn’t usually an early repayment charge with your lender, so you can move to another type of mortgage at any time, and can potentially overpay your mortgage to pay it off faster and shorten the term. However, variable rate mortgages can potentially change if the bank of England base rate rises or falls, making it harder to budget for your repayments. There can often be better and more cost-effective deals available in the marketplace, why not ask us for our recommendations?
As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments.