Fintech mortgage lender Gen H has replaced its SVR with a base rate tracker

Not having an SVR is a point of difference from most lenders and provides the possibility the reversion rate could be far more favourable at the end of the fixed rate period for example. The SVR at 7.5% may have been deterring borrowers worried about being stuck on it in a couple of years' time.

I think this is a smart move from Gen H, it makes it clear and transparent to customers and will allow them to visually track what their follow-on rate will look like.

Moving from a standard variable rate (SVR) to a base rate tracker (BRT) does feel very transparent as a pricing method, but does it remove some flexibility? Whilst many people seem to think that SVRs are always a bad thing, a rate that is wholly controlled by the lender and so will go up and down at their whim, some lenders have chosen not to pass through the full Bank of England (BoE) increases onto their SVR's to help customers - an ability you lose by directly linking your rate the BoE. So overall, it's as good as it is bad, good for pricing transparency, but bad for pricing flexibility that could be used to help customers at times of sharp increases.

I'm quite fond of Gen H as a lender due to reasons such as their innovative approach to lending with the use of equity ledgers for multiple house buyers. It is great to see them making these changes. Personally, I think this shows a more genuine and trusting approach from the innovative FinTech lender as linking their SVR to base rate + 3% maintains an expected cost, easier to calculate rather than leaving this open-ended like other SVR's. Historically and presently lenders have the discretion of changing their SVR and this can make it concerning for consumers sat on or approaching this in fluctuating economic times. I think it's a good start in providing a clearer approach to variable lending.