About the UK Early Repayment Charge Calculator
This UK early repayment charge calculator works out what it costs to leave a fixed or tracker mortgage deal before it ends, and whether moving to a lower rate saves enough interest to cover it. Enter your outstanding balance, the ERC percentage in your mortgage offer, how many months are left on the deal, your current and new rates and any fees for the new mortgage.
It is for homeowners who have seen rates fall since they fixed, people remortgaging to raise money, and anyone weighing up paying a penalty now versus waiting for the deal to expire. The result compares the interest you would pay over the remaining months of your current deal with the interest on the new deal, then subtracts the ERC and fees to show the net saving and the month you break even.
ERCs are usually a percentage of the balance repaid (often stepping down each year of the fix, for example 5%, 4%, 3%), so check the exact figure for the year you would leave in your offer document or annual statement. The comparison assumes both mortgages are capital repayment over the same remaining term and that the new rate is fixed for at least the months being compared.
With the default inputs, the net saving from switching now is −£1,852.77. Change any value above to recalculate instantly.
How to use the uk early repayment charge calculator
- 1Find your balance and ERC percentage on your latest mortgage statement or offer.
- 2Enter the months left before your current deal ends.
- 3Enter your current rate and the rate you have been offered on a new deal.
- 4Add any arrangement, valuation, legal or exit fees.
- 5Check the net saving and break-even month — positive means switching now pays.
Formula and method
The ERC is the outstanding balance multiplied by the charge percentage that applies in the year you leave. Both mortgages are then amortised month by month over the months remaining on your current deal, each with the standard repayment formula M = P × r(1 + r)^n ÷ ((1 + r)^n − 1) using the remaining term. Interest each month is the balance × annual rate ÷ 12.
Because the starting balance is the same, the difference in total cost over that window equals the difference in interest, so the net saving is the interest saved minus the ERC and fees. The break-even month is the first month in which cumulative interest saved exceeds the switching cost. Fees added to the loan instead of paid upfront would add a little extra interest that is not modelled.
- ERC%
- Early repayment charge percentage for the current year of the deal
- r
- Monthly interest rate (annual rate ÷ 12)
- n
- Remaining term in months
Worked examples
£200k at 5.5% with 2 years left, 3% ERC, new rate 4.2%
The ERC is 3% of £200,000 = £6,000, plus £999 fees. Over the remaining 24 months the lower rate saves about £5,146 in interest, which is not enough — staying put is roughly £1,853 cheaper, even though the monthly payment would drop by about £146.
Big rate gap with 3 years left, 2% ERC
Leaving costs £5,000 (2% of £250,000) plus £1,000 in fees. Cutting the rate from 6.5% to 4.25% saves about £16,752 of interest over the 36 months that were left, so switching leaves you roughly £10,752 better off.
Only 6 months left on a 1% ERC
A 1% ERC on £150,000 is £1,500, but a 1-point rate cut only saves about £748 in the 6 months remaining. Waiting and booking a new deal without an ERC is about £752 cheaper.
Frequently asked questions
What is an early repayment charge?+
An ERC is a fee your lender charges if you repay more than your overpayment allowance, or leave the mortgage, during a fixed, tracker or discounted deal period. It is usually 1% to 5% of the amount repaid and often falls each year of the deal.
How is an early repayment charge calculated?+
Most lenders multiply the amount repaid early (the whole balance if you remortgage) by the ERC percentage for the current year of the deal. For example, 3% of a £200,000 balance is £6,000. Your offer document lists the exact percentages.
Can I avoid paying an ERC?+
You can usually avoid it by waiting for the deal to end, porting the mortgage to a new home, keeping overpayments within the allowance (often 10% a year), or securing a new deal with your lender up to about six months before the fix ends.
Is it ever worth paying an early repayment charge?+
Yes, when the interest you save over the rest of the deal is greater than the ERC plus fees. This is most likely when rates have fallen sharply, the ERC is small, or there is a long time left on the current deal.
Do I pay an ERC when I move house?+
Not if you port the mortgage to the new property, assuming the lender approves it. If you repay the mortgage on sale without porting, the ERC normally applies to the balance repaid.
Is there an ERC on a standard variable rate?+
Usually not. Once your deal ends and you move to the lender’s SVR or follow-on rate, you can typically repay or remortgage without an early repayment charge.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.