UK Early Repayment Charge Calculator

What the early repayment charge calculator does

The calculator estimates the fee your lender charges if you repay or overpay a fixed or discounted mortgage before the deal ends. Enter the balance you plan to repay and the charge rate from your mortgage offer, and it returns the cost in pounds.

That figure matters for several common decisions: whether to remortgage part way through a fixed period, whether to pay off a lump sum from savings or an inheritance, and whether a large overpayment is worth making now or after the penalty period. A figure in pounds is much easier to weigh than a percentage.

What an early repayment charge is

With a fixed-rate or discounted mortgage, the lender commits to a rate for a set period and expects to earn interest throughout it. If you repay early it loses some of that interest, so the contract includes a charge to compensate. The charge usually applies during the initial deal period, typically two, three or five years and occasionally ten, and ends once you move to the standard variable rate.

It is almost always a percentage of the amount you repay. Repay the whole balance and it applies to all of it; overpay beyond your allowance and it applies to the excess. For a full repayment, enter the whole balance; for an overpayment, enter only the part above your penalty-free allowance.

How the charge is usually structured

Most UK lenders reduce the charge over the deal period. A five-year fix might charge 5% in the first year, falling by about a percentage point a year to 1% in the final year. Others use a flat rate throughout, or steps tied to calendar years. The exact figures are in your mortgage offer and annual statement.

Because the rate can change from year to year, timing matters. Waiting a few months to move into a lower band, or until the deal ends and the charge disappears, can save a large sum. Enter the percentage for the year you actually plan to repay.

The penalty-free allowance

Nearly all fixed deals let you overpay a limited amount each year without a charge, commonly up to 10% of the balance, though this varies by lender. Regular overpayments within that allowance reduce your balance and interest without any penalty.

The charge applies only above the allowance. If you are planning a large overpayment, check your allowance and consider spreading the sum across two allowance years to stay within it. To see the charge on the excess, enter only that portion.

How the calculation works

• It takes the balance you plan to repay.
• It multiplies that balance by the charge rate you enter.
• It returns the charge in pounds, with the balance and rate applied so you can check the figure.

Repaying £200,000 with a 3% charge, for example, costs £6,000.

What you need to enter

• The outstanding balance, or the part of it you intend to repay.
• The charge rate for the year you plan to repay, from your mortgage offer or statement.

Both figures come from your own paperwork. If you are unsure of the current rate, your lender’s annual statement or online account usually shows the charge that applies today and how it changes over the rest of the deal.

Reading your result

Set the charge against what you would gain from repaying early: the interest saved by moving to a lower rate, or by clearing the debt. If a remortgage saves more in interest than the charge costs, leaving early can be worthwhile; if not, waiting until the charge falls or the deal ends is usually better.

A remortgage may also bring arrangement and valuation fees, and some lenders let you port your existing deal to a new property without a charge. Treat this estimate as the starting point of the comparison.

When to use this tool

• To estimate the cost of leaving a fixed mortgage early.
• To weigh a remortgage against the exit charge.
• To plan a lump-sum overpayment around your penalty-free allowance.
• To decide whether to wait for the charge to fall before repaying.

Recalculate whenever your plans or the year you are considering change.

This is general information only and not financial advice.

About This Early Repayment Charge Calculator

Use this early repayment charge calculator to get an instant estimate based on the figures you enter. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.