What is a standard variable rate?

A standard variable rate refers to a type of interest rate that can fluctuate based on the lender's discretion and broader market conditions. This means that the interest rate may change periodically, typically in response to changes in the base interest rate set by central banks or due to changes in the lender's own pricing strategies.

In many cases, when central banks adjust their interest rates to influence the economy, lenders with a standard variable rate can increase or decrease their rates accordingly to remain competitive or to reflect changes in their costs. Therefore, option B correctly identifies that a standard variable rate is not fixed and can be altered by the provider based on various factors, including market trends.

This flexibility can work for or against borrowers, as their monthly payments can rise or fall over the life of the loan depending on these rate adjustments.