Mortgage Knowledge Base
An Early Repayment Charge is a charge you have to pay the lender, if you repay the whole or part of your mortgage within a stated period. If you take out a 5 year fixed rate mortgage with a lender, they will expect to make a profit on that money and will use the 5 year period to calculate their expected profit.
If you repay your money early, they will not make the return they had expected and so will apply an ERC charge to make up the difference. You will find details of the early repayment charges in both percentage and monetary terms on your mortgage offer.
You will find more useful information in our Guide to Early Repayment Charges.
