Early repayment charges are easy to underestimate because they often sit behind a simple question: should I switch, repay or overpay now?
The useful answer is not “the new rate is lower” or “the overpayment saves interest.” The useful answer is whether the saving still works after the current lender’s charge rules are included.
Use the Early Repayment Charge Calculator if you already know the balance, allowance and ERC rate you want to test.
Which page should you use first?
Use the ERC calculator first when the immediate question is the chargeable amount. That usually means a large overpayment, a full redemption, or a switch before the current product ends.
Use the Mortgage Overpayment Calculator first when the payment is comfortably inside the allowance and the real question is whether overpaying beats keeping cash accessible.
Use the Mortgage Overpayments Guide if the allowance, emergency fund or offset-mortgage question is still unresolved before you enter a payment figure.
What an ERC actually changes
An ERC can apply when a borrower:
- redeems the mortgage before the current product ends
- switches to a new deal before the existing charge period has finished
- pays more than the permitted overpayment allowance
- repays part or all of the loan during a tied-in period
That does not mean every early repayment is a bad idea. It means the charge needs to be in the comparison before the new rate, overpayment or sale proceeds are treated as the answer.
ERCs and exit fees solve different jobs
The two charges are often searched together, but they are not the same thing.
| Charge | What it usually relates to | Why it matters |
|---|---|---|
| Early repayment charge | Leaving a mortgage product early or exceeding the permitted overpayment allowance | Can be large enough to wipe out a rate saving |
| Exit or account closure fee | Closing, redeeming or transferring the mortgage account | Usually an administration line, and should be kept separate from the percentage ERC |
The calculator keeps the exit-fee line separate so a borrower can see how much of the cost is the product charge and how much is administration.
The allowance is not always a simple 10%
Many mortgages allow a borrower to overpay up to a set percentage without triggering an ERC, but the details still matter.
Check:
- whether the allowance is based on the current balance, original balance or a balance at a specific date
- whether the allowance resets by calendar year, mortgage year or product anniversary
- whether previous overpayments in the same period have already used part of the allowance
- whether a full redemption is treated differently from a partial overpayment
That is why the Mortgage Overpayment Calculator and ERC Calculator should be used together when a large overpayment is close to the allowance.
When paying an ERC can still make sense
Paying a charge can still be rational when the replacement path has enough value to overcome it.
The comparison should include:
- the ERC itself
- any exit or closure fee
- the new product fee
- legal or valuation costs if changing lender
- the monthly saving over the real comparison window
- the balance left at the end of that window
This is why a remortgage comparison should not stop at rate versus rate. Use the Remortgage Calculator after estimating the ERC so the switch is judged against the same time window.
When waiting is cleaner
Waiting may be stronger when:
- the ERC is high and the current deal ends soon
- the new rate saving is small
- the replacement deal has a large product fee
- a product transfer can be arranged closer to expiry without the same charge
- the borrower may move home before the next deal ends
The cheapest-looking new product can still be weak if it solves today’s rate problem by adding a new fee and a new lock-in period.
What to ask the lender before acting
Before making a final decision, ask for or check:
- the current balance used for the charge
- the remaining overpayment allowance
- the ERC percentage that applies on the planned repayment date
- any separate exit or account closure fee
- whether the charge steps down before the deal ends
- the redemption figure if the mortgage is being repaid or moved away
The calculator is useful for preparing the comparison. The lender’s redemption figure is what should be used before completion, repayment or a formal switch.
Where to go next
- Use the Early Repayment Charge Calculator to estimate the chargeable amount.
- Use the Remortgage Calculator if the question is whether to leave a deal early.
- Use the Mortgage Overpayment Calculator if the question is whether extra cash should go into the mortgage now.