Early repayment charges (ERC) explained (UK): what they are and when they apply
An early repayment charge (ERC) is a fee some mortgages charge if you repay early. Here’s what triggers it, a tiny example, and where to find it in your documents.
The short answer
An early repayment charge (ERC) is a fee that can apply if you repay your mortgage early — for example if you remortgage before your deal ends, redeem the mortgage when you sell, or repay more than any permitted overpayment allowance.
The exact rules and amounts are product-specific, but they should be shown in the standardised mortgage documentation (for regulated mortgages) and your offer terms.
A tiny example
Assume your mortgage balance is £200,000 and your product has an ERC of 3% if you repay early during the fixed period.
- ERC = (£200,000 × 3% = £6,000)
If you were switching lenders (remortgaging) before the end of the deal, that £6,000 is a real cost you’d compare against any savings from the new rate.
What to do next (quick checklist)
- Find the ERC section in your illustration/offer and note:
- when it applies (which dates/period),
- what triggers it (full redemption, partial overpayments, etc.),
- how it’s calculated (a % of balance, or a formula).
- Run a remortgage comparison using the total cost (rate + fees + ERC), not the rate alone.
Helpful links
- Related calculator: /remortgage/
- Related guide: /guides/compare-mortgage-deals-rate-vs-fees/
- Related guide: /guides/mortgage-overpayments-reduce-term-vs-payments/
- Glossary: /glossary/