How does a variable rate work?

Variable rates are ever more important in a climate where fixed rates are going up and mortgage payments are costing more.

A Variable rate is a rate that moves up and down according to the Bank Of England base rate. It is the Bank of England base rate + the rate the bank wants to charge you and is often called a "Tracker Rate". The variable rate moves up and down depending on what happens with the Base rate, they are usually a few points above that rate.

Often these rates are suitable for clients who want to change their mortgage options quickly, without incurring mortgage "Early Repayment Charges (ERCs)", which can often be up to 5% of the full balance of the mortgage left.

The rates aren't always suitable when the client needs to understand what their monthly payments they will be on a tight budget.