A variable interest rate is an interest rate that can fluctuate over the period of the mortgage term. The variable rate charged by a lender will generally be influenced by the rate movements set by the European Central Bank (ECB). It should be noted that whilst the ECB will adjust their rates as a form of monetary policy whether your lender follows suit will be up to their discretion. Factors that influence lenders in this decision will include the level of competition in the market and the lender's costs.