ERC Check

Early repayment charge when remortgaging

Remortgaging before your fixed deal ends usually triggers an ERC on your whole outstanding balance. See the charge for your balance, then weigh it against the interest a cheaper rate would save.

Early repayment charge — year 2 (4%)£8,000Penalty-free overpayment this year ≈ £20,000 (typically 10% of the balance)
Year 1 (5%)£10,000
Year 2 (4%)£8,000
Year 3 (3%)£6,000
Year 4 (2%)£4,000
Year 5 (1%)£2,000

The ERC is a percentage of your outstanding balance, charged if you repay or remortgage before your deal ends. Rates shown are typical illustrations — your real rate, tie-in and 10% allowance are in your ESIS / mortgage offer. UK-wide. Not financial advice.

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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.

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