Early Repayment Charge (ERC)
Penalty for paying off your mortgage before the fixed period ends.
Full definition
A penalty fee charged if you redeem (pay off or remortgage) your mortgage during the fixed or discount period. Typical structures: 5/4/3/2/1 (5% in year 1 down to 1% in year 5) or 2/1 (2-year fix). ERCs are calculated as a percentage of the outstanding balance, not the original loan amount. See the Early Repayment Charge calculator.
How this affects you
Whether early repayment charge (erc) is relevant to your mortgage depends on your circumstances — lender, product, deposit, employment, credit profile, and stage of application. An FCA-authorised mortgage broker will tell you exactly where it applies to your case.
Ready to talk to a broker?
An FCA-authorised UK mortgage broker can explain where early repayment charge (erc) fits into your specific application — free.
Get matched with a broker