Calculate Your Exit Fees
Exit Fee Calculation Results
Early Repayment Charge
Administration Fees
Total Exit Cost
Monthly Reduction
Detailed Fee Breakdown
Understanding Mortgage Exit Fees
What are Exit Fees?
- Charges for ending your mortgage early
- Early repayment charges during fixed periods
- Administration and processing fees
- Legal and discharge fees
- Redemption statement charges
Early Repayment Charges
- Apply during initial deal periods
- Usually 1-5% of outstanding balance
- Often reduce each year of the deal
- Some lenders allow partial overpayments
- Check your mortgage terms and conditions
When Do They Apply?
- Switching to a new lender
- Paying off your mortgage completely
- Large overpayments above allowance
- Moving home without porting
- During fixed or discount periods
How to Minimize Costs
- Wait until deal period ends
- Use annual overpayment allowances
- Consider product transfers
- Port your mortgage when moving
- Compare savings vs exit costs
Exit Fee Strategy Guide
Understanding when and how to manage mortgage exit fees can save you thousands of pounds. Our comprehensive guide helps you make informed decisions about mortgage switching and early repayment.
Timing Your Exit
The best time to switch or pay off your mortgage is typically when your current deal ends. ERCs usually don't apply once you move to your lender's standard variable rate.
- Mark your deal end date in your calendar
- Start shopping for new deals 3-6 months before
- Consider if waiting saves more than switching early
Using Overpayment Allowances
Most lenders allow you to overpay up to 10% of your outstanding balance each year without penalty. This can reduce your mortgage faster without triggering ERCs.
- Check your annual overpayment allowance
- Use it to reduce your balance before switching
- Some lenders reset allowances in January
Product Transfers
Switching to a new deal with your current lender (product transfer) often avoids exit fees and can be quicker than remortgaging to a new lender.
- No legal fees or surveys required
- Usually no early repayment charges
- Faster process than full remortgage
Porting Your Mortgage
When moving home, you may be able to 'port' your existing mortgage to your new property, avoiding early repayment charges while keeping your current rate.
- Check if your lender offers porting
- New property must meet lender criteria
- May need additional borrowing at new rates
Frequently Asked Questions
Essential information about mortgage exit fees and early repayment charges
When do early repayment charges apply to my mortgage?
Early repayment charges (ERCs) typically apply during the initial deal period of your mortgage, such as fixed rate or discount periods. They're designed to compensate the lender for the guaranteed interest they lose when you repay early. ERCs usually don't apply once you're on the lender's standard variable rate.
How much are typical mortgage exit fees in the UK?
Early repayment charges typically range from 1-5% of the outstanding mortgage balance, depending on your deal and time remaining. Administration fees are usually £100-£500, while legal/discharge fees range from £50-£300. The total can often be several thousand pounds for larger mortgages during deal periods.
Can I avoid early repayment charges when switching mortgages?
You can avoid ERCs by waiting until your current deal ends, using your annual overpayment allowance (typically 10% of the balance), or considering a product transfer with your current lender. When moving home, you may be able to 'port' your mortgage to avoid charges, though this depends on your lender's terms and your new property.
Do early repayment charges reduce over time?
Many lenders structure ERCs to reduce over time. For example, a 3-year fixed rate might have charges of 3% in year one, 2% in year two, and 1% in year three. Some deals have flat rates throughout, while others use stepped reductions. Check your mortgage terms or contact your lender for your specific structure.
Is it worth paying exit fees to get a better mortgage deal?
This depends on your individual circumstances. Calculate the total cost of exit fees against potential savings from a new deal over time. Consider factors like rate differences, remaining term, and any cashback or incentives. A mortgage broker can help you compare options and determine if switching makes financial sense despite the fees.
What happens if I can't afford the exit fees?
Some lenders allow you to add exit fees to your new mortgage balance, though this increases your overall debt. Alternatively, you might negotiate a payment plan or wait until you can afford the fees. Some new lenders offer cashback deals that can help cover exit costs, but ensure the overall deal still saves you money.