Mortgage early repayment charges: how much, and how to get out of one

In England, Wales, Scotland and Northern Ireland, mortgage early repayment charges are a contract-and-FCA issue rather than a devolved housing-law issue. The key split is residential regulated mortgages versus standard buy-to-let mortgages, because many landlord mortgages sit outside the FCA rule that limits ERCs on regulated mortgage contracts.

How much is a mortgage early repayment charge?

A standard buy-to-let mortgage is legally business borrowing, which puts it outside the definition of a regulated mortgage contract — so the FCA rule capping the early repayment charge at a reasonable pre-estimate of cost does not automatically protect a landlord the way it protects a residential borrower. For an FCA-regulated residential mortgage, the rule is that the lender must not impose an ERC except one based on “a reasonable pre-estimate of the costs as a result of the customer repaying the amount due under the regulated mortgage contract before the contract has terminated.” In practical early repayment charge calculator terms, most fixed-rate ERCs are shown as a percentage of the balance and step down during the fix: MoneySavingExpert gives the common five-year example as “5% in year one, 4% in year two, 3% in year three”. The penalty for leaving a fixed rate mortgage early is therefore usually the stated percentage in your offer or mortgage account, not a statutory flat fee.

What is the early repayment charge on a NatWest, Santander or Virgin Money mortgage?

NatWest, Santander and Virgin Money do not share one ERC tariff: NatWest says the charge “will vary depending on when you took your mortgage,” Santander allows fixed-rate overpayments “up to 10% of any fixed rate loan each calendar year” without an ERC, and Virgin Money says its ERC “will be a percentage of either your remaining balance or original loan amount.” For a NatWest mortgage, the amount is normally in the offer, annual statement or redemption figure rather than a public fixed percentage. For Santander early repayment charge questions, the 10% calendar-year allowance matters only for overpayments; repaying more than the allowance or redeeming a fixed rate can still trigger the product’s ERC. For a Virgin Money early repayment charge, the important point is whether the percentage applies to the current balance or the original loan, because that changes the cash result even where the headline percentage looks the same.

Do you pay an early repayment charge when you sell the house?

You usually pay a mortgage early repayment charge when selling a house during a fixed-rate deal, unless your lender lets you port the same rate to a new property and the sale and purchase complete on the required terms. Santander’s standard moving-home rule is explicit: “When you sell your home, you need to pay the ERC if your current deal is a fixed rate.” Santander also says that if you “sell and buy on the same day,” you will not pay an ERC on the current fixed rate unless you borrow less, which is the porting exception rather than a general selling exemption. NatWest’s tariff uses the same basic trigger, saying you may be charged if you “repay your mortgage in full before the mortgage term ends.” Santander’s separate critical- or terminal-illness wording is a compassionate-case discretion, not a normal rule that anyone who needs to move home can sell free of ERC.

Can you get out of a fixed rate without paying the charge?

You can get out of a fixed rate without paying the early repayment charge only if your contract or lender gives you a route, most commonly waiting until the ERC period ends, staying within the overpayment allowance, porting the mortgage, or receiving a discretionary waiver. The cleanest way to avoid mortgage exit fees is to switch after the fixed term has ended, because an ERC “doesn't usually apply if you're paying your lender's standard variable rate (SVR) and want to switch away.” If you are moving, porting can work where the mortgage is portable and the lender accepts the new property and affordability: “you may be able to transfer it to a new property without incurring an ERC.” Overpayments are different from leaving the rate altogether; lenders often allow some repayment without penalty, but MoneySavingExpert’s 10% example is market practice, not a statutory minimum. Getting out of early repayment charges is therefore a lender-and-product question, not a general legal right to cancel a fix.

Is it worth paying an early repayment charge?

It is worth paying an early repayment charge only if the cash saving from the new mortgage, after all fees and the ERC, is greater than the cost of staying put. The calculation starts with the ERC itself, because typical charges are “1% to 5% of the remaining loan” and often reduce each year during the deal. Then compare the interest cost of your current rate for the remaining fixed period with the interest and product fees on the replacement mortgage over the same period. The strongest case for paying is where “the new deal would have a much lower interest rate than your current one,” but paying now to beat a possible future rate rise is speculation, because “there's just no guarantee of knowing what'll happen to interest rates”. A lender’s redemption statement gives the exact ERC; broker calculators are useful only once that figure, the new rate, the product fee and the remaining fixed-term months are all known.

Last reviewed September 2026.

Sources

• FCA Handbook, MCOB 12.3.1R — “a reasonable pre-estimate of the costs as a result of the customer repaying the amount due under the regulated mortgage contract before the contract has terminated.” Source
• Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, article 61A(5) — “For the purposes of this article a borrower is to be regarded as entering into an agreement for the purposes of a business carried on, or intended to be carried on, by the borrower if the agreement is a buy-to-let mortgage contract and—” Source
• MoneySavingExpert, remortgage fees guide — “For example, with a five-year fixed deal, the ERC could be 5% in year one, 4% in year two, 3% in year three… you get the gist.” Source
• NatWest Tariff of Mortgage Charges — “This will vary depending on when you took your mortgage.” Source
• Santander mortgage overpayments page — “Overpay up to 10% of any fixed rate loan each calendar year (January to December) without paying an early repayment charge.” Source
• Virgin Money Tariff of Mortgage Charges — “The fee will be a percentage of either your remaining balance or original loan amount.” Source
• Santander existing customers moving home page — “When you sell your home, you need to pay the ERC if your current deal is a fixed rate.” Source
• Santander existing customers moving home page — “If you sell and buy on the same day, you won't pay an early repayment charge (ERC) on your current fixed rate, unless you borrow less.” Source
• NatWest Tariff of Mortgage Charges — “You may be charged this if you repay your mortgage in full before the mortgage term ends.” Source
• MoneySuperMarket, early repayment charges guide — “An early repayment charge doesn't usually apply if you're paying your lender's standard variable rate (SVR) and want to switch away.” Source
• MoneySuperMarket, early repayment charges guide — “If you have a portable mortgage, you may be able to transfer it to a new property without incurring an ERC.” Source
• MoneySuperMarket, early repayment charges guide — “Typically, ERCs range from 1% to 5% of the remaining loan, and this percentage tends to decrease each year you're into the deal.” Source
• MoneySavingExpert, remortgage fees guide — “The new deal would have a much lower interest rate than your current one.” Source
• MoneySavingExpert, remortgage fees guide — “But without a crystal ball, there's just no guarantee of knowing what'll happen to interest rates – so doing this would be very risky.” Source