Calculate Your Exit Fees
Exit Fee Calculation
Early Repayment Charge
Administration Fees
Total Exit Cost
Monthly Reduction
Fee Breakdown
Understanding Mortgage Exit Fees
What are Exit Fees?
- Charges for ending your mortgage early
- Early repayment charges during fixed periods
- Administration and processing fees
- Legal and discharge fees
- Redemption statement charges
Early Repayment Charges
- Apply during initial deal periods
- Usually 1-5% of outstanding balance
- Often reduce each year of the deal
- Some lenders allow partial overpayments
- Check your mortgage terms and conditions
When Do They Apply?
- Switching to a new lender
- Paying off your mortgage completely
- Large overpayments above allowance
- Moving home without porting
- During fixed or discount periods
How to Minimize Costs
- Wait until deal period ends
- Use annual overpayment allowances
- Consider product transfers
- Port your mortgage when moving
- Compare savings vs exit costs
Frequently Asked Questions
Essential information about mortgage exit fees and early repayment charges
When do early repayment charges apply to my mortgage?
Early repayment charges (ERCs) typically apply during the initial deal period of your mortgage, such as fixed rate or discount periods. They're designed to compensate the lender for the guaranteed interest they lose when you repay early. ERCs usually don't apply once you're on the lender's standard variable rate.
How much are typical mortgage exit fees in the UK?
Early repayment charges typically range from 1-5% of the outstanding mortgage balance, depending on your deal and time remaining. Administration fees are usually £100-£500, while legal/discharge fees range from £50-£300. The total can often be several thousand pounds for larger mortgages during deal periods.
Can I avoid early repayment charges when switching mortgages?
You can avoid ERCs by waiting until your current deal ends, using your annual overpayment allowance (typically 10% of the balance), or considering a product transfer with your current lender. When moving home, you may be able to 'port' your mortgage to avoid charges, though this depends on your lender's terms and your new property.
Do early repayment charges reduce over time?
Many lenders structure ERCs to reduce over time. For example, a 3-year fixed rate might have charges of 3% in year one, 2% in year two, and 1% in year three. Some deals have flat rates throughout, while others use stepped reductions. Check your mortgage terms or contact your lender for your specific structure.
Is it worth paying exit fees to get a better mortgage deal?
This depends on your individual circumstances. Calculate the total cost of exit fees against potential savings from a new deal over time. Consider factors like rate differences, remaining term, and any cashback or incentives. A mortgage broker can help you compare options and determine if switching makes financial sense despite the fees.