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 and offer letter give details of any early repayment charges that apply to you.

Why do we charge them?

We charge them 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 compensates 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 set out in your Mortgage Illustration and offer letter, you repay the loan on which an early repayment charge applies. We’ll base the charge on the amount you owe when you repay the loan, but it will never be more than the maximum charge we set out.

If you repay part of the loan on which an early repayment charge applies, we'll charge you a proportion of the early repayment charge due.

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%.

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.

Your home may be repossessed if you do not keep up repayments on your mortgage.