What is an Early Repayment Charge?

An Early Repayment Charge is payable when you repay part or all of your mortgage over a specified limit.

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Written by Tanisha Anand
Updated over a week ago

An Early Repayment Charge (ERC) is payable when you pay back part or all of your mortgages over the limit we specify during your application. This is known as an overpayment threshold.

The amount that you will be charged depends on what initial interest rate you select, and how long you choose to have this initial rate over.


Annually, you can overpay up to 10% of your loan balance (the balance when your current fixed initial interest rate started) with no Early Repayment Charges (ERC) applied. This is different from most lenders, as it allows you to overpay based on your original mortgage amount, rather than the amount you currently owe.

If you were to make a repayment over this threshold, you could be subject to an ERC depending on the mortgage product you have and how much time you have remaining.

Year of repayment

2-year fix

3-year fix

5-year fix

Year 1

2.00% of balance repaid

3.00% of balance repaid

5.00% of balance repaid

Year 2

1.00% of balance repaid

2.00% of balance repaid

4.00% of balance repaid

Year 3

N/A

1.00% of balance repaid

3.00% of balance repaid

Year 4

N/A

N/A

2.00% of balance repaid

Year 5

N/A

N/A

1.00% of balance repaid

The ERC would be applied to the amount you repaid over the 10% threshold. For example, if you repaid £1,000 over the 10% allowance, then the charge would apply to the £1,000, rather than the entire amount repaid.

The table above is an example, to see the percentage of your ERC’s please refer to your offer document.

When you are within 90 days of your initial interest rate coming to an end, you can lock in a new rate with a product transfer, to find out more read our FAQ on product transfers here.

Send us a message on live chat or email us if you want to speak to a member of our team.

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