Go paper-free
Amend paper-free preferences for your statements and communications.
Early repayment charges
What are they?
We offer different types of mortgage products with different interest rates. With some of these there may be a charge if you repay all or part of your loan within a certain period of time, we call these early repayment charges.
Your Mortgage Illustration, offer letter and mortgage statement give details of any early repayment charges that apply to you.
If you would like to know what your remaining overpayment allowance is for the year, please fill out our online form or call us and we’ll get this posted to you.
Why do we charge them?
We make these charges because when setting up the funds to provide loans to customers, we expect them to keep the money for the time agreed at the outset. There is a cost to us if they repay some or all of the loan sooner. The charge is designed to compensate us for this cost.
When do we charge them?
We'll apply an early repayment charge if, before the end of the early repayment charge period you:
- repay all or part the loan
- ask and we agree to transfer all or part of your loan to a new mortgage product
- make your payment before the date on the redemption statement.
The charge will never be more than the maximum amount set out in your offer letter and Mortgage Illustration and will be based on:
- whether you repay all or part of the loan
- the amount you owe when you make the payment.
If you are on a fixed or tracker rate, an ERC could be payable up to and including the last day of this rate, please check your illustration and or offer for details of your particular rate.
-
Amount you owe: £50,000
Percentage early repayment charge payable: 5%
Total early repayment charge payable: £2,500
Amount you repay early: £25,000
Total early repayment charge payable: £1,250
We’ll also apply an early repayment charge if we agree to transfer all or part of your loan to a new mortgage product during the early repayment charge period.
Are there any exceptions?
Currently, as a concession, in each calendar year you can make regular or lump-sum overpayments of up to 10% of the amount owed at 1st January without having to pay an early repayment charge. (This is for any product where an early repayment charge applies.)
If the total amount you overpay during the year exceeds 10%, we'll only charge you an early repayment charge on the proportion you overpay above 10%.
-
Amount owed on 1st Jan: £50,000
Percentage early repayment charge payable: 5%
Total amount of regular/lump-sum overpayments made between 1st Jan and 31st Dec: £10,500
Less the amount of regular/lump-sum overpayments where early repayment charges do not apply (10% of £50,000): £5,000
Total amount of regular/lump-sum overpayments where early repayment charge applied: £5,500
Total early repayment charge payable (£5,500 x 5%): £275
If you then repay the loan in full within six months of making a regular or lump-sum overpayment, we'll require you to pay the full early repayment charge, including the portion we previously did not charge.
Remember, we can change or withdraw our 10% early repayment charge concession, so if you decide you want to make regular or lump-sum overpayments, it’s always a good idea to contact us and check if the policy has changed. We will give at least 3 months notice before withdrawing or reducing the concession.
If you're moving home and can take the product rate with the early repayment charge with you to a new mortgage, you'll not have to pay the early repayment charge. This is also known as porting.