Early repayment charge (ERC)
An early repayment charge is a fee you pay if you repay or switch your mortgage before the end of its deal period.
Also known as: ERC, early repayment charges, early repayment fee
It is usually a percentage of the outstanding balance, often falling each year of the deal. For example, 3% on a £150,000 balance would be £4,500.
Check the ERC before switching early, and consider waiting until the deal ends. Most mortgages allow you to overpay a set amount each year without a charge.
An authorised mortgage adviser can explain how this applies to your circumstances, and MoneyHelper offers free guidance. Your home may be repossessed if you do not keep up repayments on your mortgage.
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