Early repayment charges

In return for the benefits they offer, some of our mortgages carry a charge if you repay all or part of your mortgage in the early years or switch to a different mortgage - these are called early repayment charges.

How much can I repay without having to pay an early repayment charge?

• If you want to pay off part of your mortgage or make extra payments where there is an early repayment charge, as a current concession you can repay up to 10% of your mortgage balance each year without having to pay the charge.
• The 10% is calculated using the balance as at 1 January of the year in which you make the repayment.
• If you repay up to 10% and then repay the remainder of the loan in full within six months, the early repayment charge will also be charged on the 10% you initially repaid.
• The 10% overpayments limit is a concession and could be withdrawn at any time.
• Where there is no early repayment charge period or it has expired you can repay the loan in full or in part whenever you want.

Moving home with your current mortgage deal
If you move home, you may be able to take the terms of your current mortgage deal with you. This could be so you:

• continue to benefit from a particular deal you took out, such as a fixed rate or tracker that you want to keep until the end of the original period of the deal, or
• avoid having to pay an early repayment charge.

Taking your current deal with you means that, when you repay the mortgage on your current home to move, you take out a new mortgage on your new home for at least the same amount.

In other words, any fixed rate or tracker would continue to apply for the remainder of the original deal period; and, if there's an early repayment charge on your mortgage, you won't have to pay it. The charge would still apply though if, after you'd moved, you subsequently repaid the mortgage (or more than 10% of it) while you were still benefiting from the fixed rate or tracker.

If there’s a delay in your move
If there’s a delay between repaying your current mortgage and taking out a new one on a new property, then you will have to pay any early repayment charge.

However, if your new mortgage starts within eight weeks of the current one being repaid and, apart from the delay, everything else above applies, then the early repayment charge will be refunded.

If you need to borrow more
If you want to take your current deal with you when you move, but borrow more on top, you’ll be able to choose from the deals available at that time for the extra you need.

It’s also important to note that our lending policy at that time will also apply, and this could be different from the policy that applied at the time of your most recent application.

In some cases – for example, where you want to borrow more in relation to your income than we are prepared to lend on standard terms – the additional borrowing will only be agreed if the whole of your new mortgage is on specific terms.

This may mean that you will be unable to transfer the terms of this mortgage as described above.

If you’re borrowing less
If you move and want to take your mortgage deal with you, but your new mortgage is for a smaller amount, any early repayment charge that you have to pay will be based on the difference between the two mortgages.

If you’re borrowing less and there’s a delay between repaying the current mortgage and taking out the new one, the paragraph above – ‘If there’s a delay in your move’ – applies, but the amount refunded will be calculated proportionately.

If your mortgage began before 1 November 2008, a different policy may apply, please call our Helpline on 0845 603 1637 for details.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE