There are various reasons you might end your mortgage deal early, for example, if your current deal is ending, to borrow more, to release equity or to pay it off in full. Sometimes, it simply makes financial sense to switch mortgages to take advantage of lower interest rates. And some borrowers look to move to a deal with more flexible terms, which allow them to make overpayments.
Before you hit the exit button on your mortgage, be aware: most mortgage lenders charge you for ending a fixed-term mortgage early. It’s important to check, as the early repayment charge (ERC) could cancel out any savings you might make by remortgaging or overpaying on your existing deal.
As trusted mortgage brokers, we often hear from customers, “Can I avoid paying the ERC?” We’ve put together this helpful guide to help you understand what the charge is, why it exists, when you have to pay it and how to avoid it altogether.
Scroll down for an at-a-glance guide on what each of the major lenders charges, as of April 2026.
For friendly, straightforward and FREE advice on remortgaging, get in touch with YesCanDo Money. We have our finger on the pulse of the mortgage market and can give you valuable guidance on whether it’s best to pay the ERC or hang on to your current deal.
What is a mortgage early repayment charge?
An early repayment charge (ERC) is a charge applied by lenders when borrowers exit their mortgage deal, make large overpayments, or pay off their mortgage early. Early repayment charges typically range from 1% to 5% of the outstanding mortgage balance, and this percentage may decrease over time as the borrower remains in the mortgage deal.
The ERC is there to protect lenders by compensating for the interest they lose and to dissuade borrowers from applying for a new mortgage every time they come across a better deal.
When might you pay the early repayment charge (ERC)?
You may be subject to an early repayment fee if you:
- Pay off your mortgage with a lump sum before your current deal ends
- Switch to a better mortgage deal before your current mortgage deal ends
- Make an overpayment
- Switch to a new mortgage product while you’re in the special-rate period
- Are moving house but are unable to port your mortgage to your new property
- Want to transfer your mortgage to a property that is worth less than your current home
Do ERCs only apply to fixed-rate mortgages?
ERCs are most commonly found on fixed-rate deals, but they can also apply to some tracker or discounted mortgages, so it’s always worth checking the small print.
If you have a fixed-rate mortgage, the ERC usually applies to the tie-in period of your mortgage (e.g., 2 years, 5 years, 10 years), but it can sometimes extend beyond the deal period.
So, if you are on a 2-year fixed rate deal, for example, you might still incur the ERC if you try to switch deals when it expires. However, in that scenario, you would be on the lender’s standard variable rate, so switching to a new deal would likely help you save money.
How much does an early repayment charge cost?
Early repayment charges vary from lender to lender. While some charge a flat fee, ERCs are typically calculated as a percentage of the outstanding balance on the mortgage, typically between 1% and 5%.
While it might not seem like a huge penalty, if your outstanding mortgage balance is £200,000, that’s £2,000 – £10,000 you’ll need to pay at the point you switch. That’s why it’s crucial to do the maths and work out if the savings or benefits are worth it.
The cost of an early repayment charge is based on the outstanding mortgage amount and the timing of the repayment, with higher charges typically applied in the earlier years of the mortgage.
Some lenders reduce the percentage due towards the end of the mortgage deal. For example, a 5% ERC in year 1 of your deal, tapering off as the deal progresses. So if you are looking to remortgage, it might be wise to hold off until the fee is low enough that the savings outweigh it.
How do I know if there is an early repayment charge on my mortgage?
The specific terms of an ERC, including the amount and any conditions, are outlined in the mortgage agreement between the borrower and the lender, so it’s very important that you fully understand the terms when you first take out the mortgage. A good mortgage broker or adviser will always highlight any fees due at the point you sign your mortgage agreement.
Early repayment charges by mortgage lender
The tables below show typical early repayment charge structures for some of the UK’s biggest mortgage lenders. These are based on common product ranges and reflect the patterns most borrowers will see, but they are not official published schedules. Each lender offers dozens of products, and ERCs can vary by product type, LTV, deal length and when the deal was launched. Always check your own mortgage offer or speak to your adviser for the exact figures that apply to you.
Please note: The figures below are a guide only and should not be relied on as a quote. Your actual ERC will be confirmed in your mortgage offer.
Halifax early repayment charges
| Year | 2 Year Fixed | 5 Year Fixed |
|---|---|---|
| Year 1 | 2% | 5% |
| Year 2 | 1% | 4% |
| Year 3 | — | 3% |
| Year 4 | — | 2% |
| Year 5 | — | 1% |
Santander early repayment charges
| Year | 2 Year Fixed | 5 Year Fixed |
|---|---|---|
| Year 1 | 2% | 5% |
| Year 2 | 1% | 4% |
| Year 3 | — | 3% |
| Year 4 | — | 2% |
| Year 5 | — | 1% |
HSBC early repayment charges
| Year | 2 Year Fixed | 5 Year Fixed |
|---|---|---|
| Year 1 | 2% | 5% |
| Year 2 | 1% | 4% |
| Year 3 | — | 3% |
| Year 4 | — | 2% |
| Year 5 | — | 1% |
HSBC’s ERC reduces on a daily basis rather than in annual steps, so the actual charge depends on exactly when in the year you exit your deal.
NatWest early repayment charges
| Year | 2 Year Fixed | 5 Year Fixed |
|---|---|---|
| Year 1 | 2% | 5% |
| Year 2 | 1% | 4% |
| Year 3 | — | 3% |
| Year 4 | — | 2% |
| Year 5 | — | 1% |
Barclays early repayment charges
| Year | 2 Year Fixed | 5 Year Fixed |
|---|---|---|
| Year 1 | 2% | 5% |
| Year 2 | 1% | 4% |
| Year 3 | — | 3% |
| Year 4 | — | 2% |
| Year 5 | — | 1% |
Some Barclays 5-year and 10-year products use a flat ERC throughout the deal rather than a tapering structure. Always check your specific product.
Nationwide early repayment charges
| Year | 2 Year Fixed | 5 Year Fixed |
|---|---|---|
| Year 1 | 2% | 5% |
| Year 2 | 1% | 4% |
| Year 3 | — | 3% |
| Year 4 | — | 2% |
| Year 5 | — | 1% |
Lloyds Bank early repayment charges
| Year | 2 Year Fixed | 5 Year Fixed |
|---|---|---|
| Year 1 | 2% | 5% |
| Year 2 | 1% | 4% |
| Year 3 | — | 3% |
| Year 4 | — | 2% |
| Year 5 | — | 1% |
TSB early repayment charges
| Year | 2 Year Fixed | 5 Year Fixed |
|---|---|---|
| Year 1 | 2% | 5% |
| Year 2 | 1% | 4% |
| Year 3 | — | 3% |
| Year 4 | — | 2% |
| Year 5 | — | 1% |
Virgin Money early repayment charges
| Year | 2 Year Fixed | 5 Year Fixed |
|---|---|---|
| Year 1 | 2.5% | 5% |
| Year 2 | 1.5% | 4% |
| Year 3 | — | 3% |
| Year 4 | — | 2% |
| Year 5 | — | 1% |
Coventry Building Society early repayment charges
| Year | 2 Year Fixed | 5 Year Fixed |
|---|---|---|
| Year 1 | 2% | 5% |
| Year 2 | 1% | 4% |
| Year 3 | — | 3% |
| Year 4 | — | 2% |
| Year 5 | — | 1% |
Yorkshire Building Society early repayment charges
| Year | 2 Year Fixed | 5 Year Fixed |
|---|---|---|
| Year 1 | 2% | 5% |
| Year 2 | 1% | 4% |
| Year 3 | — | 3% |
| Year 4 | — | 2% |
| Year 5 | — | 1% |
Skipton Building Society early repayment charges
| Year | 2 Year Fixed | 5 Year Fixed |
|---|---|---|
| Year 1 | 2% | 5% |
| Year 2 | 1% | 4% |
| Year 3 | — | 3% |
| Year 4 | — | 2% |
| Year 5 | — | 1% |
A note on lender ERC structures: Most major UK lenders use a similar tapered ERC structure on their standard fixed-rate products: typically 2% then 1% on a 2 year fix, and 5% reducing by 1% each year on a 5 year fix. Some lenders apply small variations, and specialist lenders, buy-to-let products and longer-term fixes can differ significantly. Your mortgage offer is always the definitive source for the exact charges that apply to you.
How to get a mortgage with no early repayment charge
Certain types of mortgage, such as tracker and standard variable rate deals, don’t come with an early repayment charge. The catch is that they usually come with a higher interest rate, so you’ll likely pay more across the mortgage term.
If you’re keen on repaying your mortgage early, these deals can still be worth it. But if your priority is to keep your monthly repayments to a minimum, then a fixed-rate mortgage is likely the better option.
If you’re unsure as to which type of mortgage suits your situation, feel free to get in touch with our team. We’ll be happy to talk you through your options with no charge or obligation.
How to avoid early repayment charges
Trying to figure out when to remortgage to avoid an early repayment charge? The first thing to do is check your mortgage agreement to find out when (and if) the ERC expires on your deal. At that point, you will be free to switch to a different lender or pay off your mortgage in full without penalty.
There are other ways to avoid paying the early repayment charge as follows:
- Time your remortgage to coincide with the end of your current mortgage deal
- Keep within the repayment terms and don’t make overpayments
- Choose a deal with no early repayment charge, such as a tracker rate mortgage or a standard variable rate deal (although you will likely have to pay more interest on these types of loans)
- If you are moving home, port your mortgage instead of switching to a new mortgage product (but note, some lenders will still charge you the ERC to transfer your mortgage to a new property, so check with them first)
- When switching to a new mortgage deal, add the early repayment charge to your new agreement (however, note that while this helps in the short term, you will pay more interest on the charged amount in the long-term)
When is it worth paying an early repayment charge?
Paying the early repayment charge is worth it if the savings or benefits outweigh the cost.
For example:
- ERC = £3,000
- Monthly savings on the new mortgage rate = £150
- Annual saving on new mortgage rate = £150 × 12 = £1,800
- 2-year saving on new mortgage rate = £1,800 × 2 = £3,600
£3,600 − £3,000 = £600 better off
In contrast, in this scenario, it doesn’t make financial sense to swap:
- ERC = £4,000
- Monthly saving on new mortgage rate = £100
- Annual saving on new mortgage rate = £100 × 12 = £1,200
- 2-year saving on new mortgage rate = £1,200 × 2 = £2,400
£2,400 − £4,000 = £1,600 worse off
If that’s the case, it might be worth sticking to the deadline on your existing mortgage agreement before switching your deal.
Not sure whether to wait or switch your mortgage now? Contact YesCanDo for advice
Early repayment charges can make or break a remortgage decision. Get it right, and you could save thousands. Get it wrong, and you could wipe out any benefit of switching.
If you’re thinking about remortgaging but aren’t sure, a quick conversation now could save you a lot of money later.
The team at YesCanDo Money can help you determine whether switching now will genuinely save you money. We can look at the numbers and help you make the right call.
If it’s time to switch, we can help you find the right mortgage for your circumstances. With access to over 90 lenders and 14,000 deals, you can trust that we have nothing but your best interests at heart.
Contact us today by calling 03300 884 407, or arrange an appointment via WhatsApp or by filling out our callback form.
Frequently asked questions – What is an early repayment charge, and when do you pay it?
Does an overpayment allowance protect from an early repayment charge?
An overpayment allowance lets you repay a portion of your mortgage early (typically up to 10% per year) without triggering an ERC. If you go above that limit, an ERC usually applies to the amount over the allowance. And if you repay the mortgage in full during the deal period, an ERC will apply to the full balance. So while an overpayment allowance protects you from charges on smaller overpayments, it won’t help if you want to clear the mortgage early.
Where can I find out details about the early repayment charge on my mortgage?
You can contact your lender directly to ask them about your early repayment charge. Your Mortgage illustration, mortgage agreement, and mortgage statement should also contain details about the ERC period.
Is it worth paying an early repayment charge to remortgage?
The decision to accept an early repayment charge is an individual one that depends on your financial situation and goals.
For most people, it depends on whether the numbers work. If the savings from a new deal outweigh the cost of the ERC, it could be worth it. If not, you’re usually better off waiting.
At YesCanDo Money, we can help you calculate the potential benefits and give you a straight answer on whether switching your loan early actually makes sense.
Do you pay an early repayment charge if you switch deals with the same lender?
Not always. Many lenders let you switch to another of their mortgage products without charging an ERC, especially if your current deal is ending. However, if you switch early during a fixed or introductory period, you may still have to pay the fee. It depends on the lender and the terms of your deal, so always check first.
