Mortgage Early Repayment Charges (ERC) are charges that you may have to pay if you remortgage early. Your mortgage agreement will state whether you are liable to pay ERCs and, if so, how much you will have to pay.
ERC charges can be quite high so it’s important to check your mortgage agreement before deciding to repay your mortgage early or even before making large capital repayments.
ERC charges are usually a percentage of the amount you repay. So, for example, if you owe £100,000 on your mortgage and you repay it in full within two years of the original agreement, your ERC would be around £2,000 (2% of £100,000).
Some lenders may also charge a mortgage exit administration fee on top of the ERC for closing the mortgage account.
If you are liable to pay ERCs, it is important to factor these into your calculations when considering whether or not to repay your mortgage early.
You will find more useful information in our Guide to Early Repayment Charges.
