What is Early Repayment Charge (ERC)?
Early Repayment Charge is a charge made by your mortgage lender which is payable on certain types of loan. The charge is only applied if the loan is paid off or part-paid off within the specified early repayment charge period agreed with you at the outset of the mortgage being set up. This is possibly the downside of benefiting from the certainty conferred by fixed rate or the cheaper mortgage offered by a discounted rate. Some lenders can lock you into a repayment charge so beware and get advice about this from one of our mortgage consultants. If you see an incredibly good interest rate below the prevailing variable rate the chances are they want something in return – your commitment, therefore it could mean itll cost you a lot more if you decide to move lender in future.
