Definition · Glossary
Variable rate
Personal LoansLoan Types & Lenders
In plain English
A variable interest rate can change during the life of a loan or mortgage, usually in response to changes in the Bank of England base rate or the lender's own pricing decisions.
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Example
A variable-rate mortgage means your monthly payment could go up or down if interest rates change.
Don't get caught out
Common misunderstandings
- Variable rates can go down as well as up — but borrowers should plan for repayments increasing.