What does SVR stand for?

Q I usually invest in fixed-rate bonds and the Moneyfacts website currently lists a five-year bond from Halifax at 5.65% as the best rate for a building society. However, the rate alert refers to the SVR being increased by various building societies - in the case of a Birmingham Midshires Solutions account to an impressive 7.04% from 1 September. What is the SVR? And can I invest in it?
SB

A Thank you for this timely reminder to all financial writers to avoid jargon and acronyms wherever possible - not everyone instantly recognises financial terms, no matter how common we might think they are.

SVR stands for standard variable rate, which is the usual interest rate charged by banks and building societies on mortgages that do not have a fixed, capped or discounted rate. It is based on the Bank of England base rate (BBR), and is usually a percentage point or more above it. So, for example, with the BBR currently at 4.75%, most banks and building societies will have an SVR around 5.5% to 6.5%.

The reason the alert mentions an increase in SVRs is because the BBR was recently increased by 0.25% to 4.75%, so lenders and savings providers will soon be putting up their rates to match this. Some have already done so.

When financial institutions raise the interest rates they charge customers, they also tend to raise the rates they pay on savings accounts. But keep reading those best buy tables closely - banks and building societies are not obliged to change their rates in line with the BBR, except on accounts where the interest rate is linked to the base rate. While mortgage lenders are generally swift to raise rates when the base rate goes up, savings account providers can be a lot slower to follow suit, or sometimes increase their rate by less than the BBR increase.