Early Repayment Charges

An Early Repayment Charge (ERC) will apply if your client makes an overpayment over their allowance or redeems their mortgage during the term of their deal (except for clients who redeem their loan in the final calendar month of their deal). ERCs are set at the start of the mortgage term.

From 29 May 2013

  • Our fixed and tracker rate mortgages have an overpayment allowance of up to 10% of the initial balance, minus any administration fees
  • If your client overpays by more than 10% in one mortgage anniversary year, they will incur an ERC which is payable on the amount above the overpayment allowance. Details about the percentage amount can be found below
  • Tracker rate mortgages reserved after 2 May 2014 have no ERCs so your clients can make unlimited overpayments without incurring a charge

Products reserved on or before 28 May 2013

  • The overpayment allowance is £500 per calendar month
  • If your client overpays by £500.01 or more in one calendar month, they will incur an ERC which is payable on the entire overpayment amount

ERCs payable

For fixed products reserved on or after 8th October 2014, the percentage charge payable will reduce year on year during the product deal period as detailed in the table below:

Deal Term Percentage Payable (Year)
  1 2 3 4 5 6 7 8 9 10
2 year tracker 0% 0%                
5 year tracker 0% 0% 0% 0% 0%          
2 year fixed 2% 1%                
3 year fixed 3% 2% 1%              
5 year fixed 5% 4% 3% 2% 1%          
10 year fixed 7% 7% 7% 7% 6% 5% 4% 3% 2% 1%

For products reserved from 2 May 2014 to 7 October 2014, the percentage charge payable is detailed in the table below:

 Deal Term  Percentage Payable
 2 year (tracker)  0%
 2 year (fixed)  2%
 3 year (fixed)  3%
 5 year (fixed)  4%

For products reserved prior to 2 May 2014, please refer to your client's mortgage offer.