Typical stepped ERC (5-year fixed)
| Stage of deal | Typical rate |
|---|---|
| Year 1 of the deal | 5% |
| Year 2 | 4% |
| Year 3 | 3% |
| Year 4 | 2% |
| Year 5 | 1% |
Flat-rate ERC
| How it works | Detail |
|---|---|
| Flat rate throughout the tie-in | 1%–5% (some up to 6%+) |
| Charged on | The outstanding balance |
Frequently asked questions
How is an early repayment charge calculated?
An ERC is a percentage of your outstanding mortgage balance — not of the amount you repay. For example, a 5% ERC on a £200,000 balance is £10,000. Typical charges range from 1% to 5%, and your exact rate is set by your lender.
Does the ERC go down each year?
Often, yes. Many fixed deals step the rate down over the tie-in period — a common pattern is 5% in year one falling to 1% in the final year. But some lenders charge a single flat rate throughout, so always check your own paperwork.
Can I overpay without paying a charge?
Most lenders let you overpay around 10% of the balance each year with no ERC (some, such as NatWest or Metro, allow up to 20%). The charge only applies to the part above your allowance, or to a full redemption during the tie-in.
When does an early repayment charge apply?
During your fixed, tracker or discount tie-in period — if you repay the mortgage in full, remortgage to another lender, or overpay beyond your allowance before the deal ends. The end date is stated in your mortgage offer.
Is the charge on the balance or on the amount I repay?
For a full redemption or a remortgage it is charged on the whole outstanding balance. For a partial overpayment it is charged only on the amount above your annual penalty-free allowance.
Where do I find my exact ERC?
It is set out in your ESIS (European Standardised Information Sheet) or mortgage offer/illustration. You can also ask your lender for a redemption statement, which shows the exact figure to a given date.
Does this apply across the whole UK?
Yes. Mortgage rules are UK-wide (regulated by the FCA), so ERCs work the same way in England, Scotland, Wales and Northern Ireland — unlike stamp duty, which differs by nation.
This is a free, independent educational tool. The figures are illustrative estimates based on typical UK early repayment charges — your actual rate, tie-in period and overpayment allowance are set by your lender and stated in your ESIS or mortgage offer. This is not financial advice. Always check your own paperwork or speak to your lender or a regulated mortgage adviser before acting.
Sources: MoneyHelper — mortgages (early repayment) · HomeOwners Alliance — Early repayment charges · Moneyfacts — ERCs explained