Glossary · Selling a home

Early repayment charge (ERC)

A fee charged by a lender if you repay a mortgage, or move it, during a fixed or discounted deal period — usually a percentage of the outstanding balance.

Also known as: ERC · redemption penalty

Early repayment charges often fall each year of a deal, for example from several percent in year one to a lower figure later. When you sell, the charge is deducted from the sale proceeds on completion unless you port the mortgage to your new home.

Ask your lender for a redemption statement before choosing your timing.

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