Estimate Your Early Repayment Charge (ERC)
Use this calculator to estimate the fee a lender may charge if you repay part or all of your loan early during a deal period.
This is an estimate for planning purposes only. Your lender's terms and timing rules can vary.
What is an early repayment charge?
An early repayment charge is a fee some lenders apply if you repay your mortgage or loan before the end of a fixed, tracker, or discounted deal period. It is designed to compensate the lender for expected interest they may lose when you leave the deal early.
In practice, many mortgage products allow a certain amount of overpayment each year (for example, up to 10% of the outstanding balance) without penalty. Any repayment above that allowance can become chargeable and trigger an ERC.
How this calculator works
This calculator follows a common ERC method used in UK mortgage products:
- Penalty-free allowance amount = Outstanding balance × allowance %
- Chargeable repayment = Repayment amount − penalty-free allowance (not below £0)
- Early repayment charge = Chargeable repayment × ERC rate %
- Total estimated fees = ERC + admin/redemption fee
If your planned repayment is below the allowance, your estimated ERC is £0 (though admin fees may still apply).
Worked example
Scenario
- Outstanding balance: £200,000
- Repayment now: £50,000
- Penalty-free allowance: 10%
- ERC rate: 3%
Calculation
- Allowance amount = £200,000 × 10% = £20,000
- Chargeable repayment = £50,000 − £20,000 = £30,000
- ERC = £30,000 × 3% = £900
In this example, your estimated early repayment charge is £900, plus any admin/redemption fee your lender includes.
When an ERC might apply
- Paying off your mortgage in full before your fixed deal ends
- Making a large lump-sum overpayment above your annual allowance
- Switching to another lender too early
- Selling your home while still in a tied deal period
Tips to reduce or avoid ERC costs
1) Use your annual allowance carefully
If your lender allows 10% overpayment each year, spread repayments to stay inside that limit where possible.
2) Check the exact deal-end date
Waiting until your tie-in period ends can eliminate the ERC entirely. Even a short delay can save a lot.
3) Confirm year-by-year ERC rates
Some deals taper charges (for example, 5% in year one, then 4%, 3%, etc.). Timing matters.
4) Ask about portability
If moving home, a portable mortgage might help you avoid paying an ERC, depending on lender criteria.
Important limitations
Real lender calculations can be more complex than a simple percentage model. Your final figure may differ because of:
- Whether allowance is based on original balance or current balance
- Calendar-year vs mortgage-year allowance windows
- Partial-month interest adjustments and redemption statements
- Product-specific clauses and exceptions
Always request an official redemption statement or fee quote from your lender before making a decision.
Bottom line
This early repayment charge calculator gives you a quick estimate so you can compare options and plan cash flow. Use it as a decision aid, then verify the exact figures with your lender or broker before repaying.