Early Repayment Charges
In return for the benefits they offer, some C&G 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?
- During the Early Repayment Charge period you can repay up to 10% of your loan's balance each year, without paying the charge (using the balance as at 1 January of the year in which you make the repayment). If your total mortgage is made up of more than one loan or part, each is treated separately, so you can repay up to 10% on each.
- Please note, however, 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.
- 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.
I'm moving home and I’m confused about the Early Repayment Charge - do I have to pay it?
If you are repaying your mortgage during an Early Repayment Charge period to move house, you may not have to pay the Early Repayment Charge if you take out a C&G mortgage on your new home. If you do this, exactly what happens depends on how much of the Early Repayment Charge period is left when you move. So:
a) If your Early Repayment Charge period has more than one year to run
We will refund the Early Repayment Charge to you provided that you transfer the following to your new C&G loan:
- the balance of the original loan,
- any remaining part of the original Early Repayment Charge period,
- the terms of your original loan.
Transferring the terms of your original loan to your new home means that:
-If you originally took out a Cashback or Discount Mortgage, the replacement loan must be at the Standard Variable Mortgage Rate (with any discount continuing to apply for the remainder of the original discount period).
-Or if you had a Fixed-Rate or Capped-Rate Mortgage, you must take the fixed or capped rate with you for the remainder of the fixed-rate or capped-rate period.
-And whatever type of mortgage you are transferring, any remaining part of the Early Repayment Charge period will apply to the new loan.
b) If your Early Repayment Charge period has less than one year to run
You can either:
- take the terms of your old mortgage with you to a new loan (as described above) or,
- if you prefer, simply repay the old mortgage and, as long as you take out a new C&G mortgage for the same or a larger amount, we’ll waive the Early Repayment Charge. You'd be able to choose any of the mortgage offers available at that time for your new loan.
What if I need to borrow a different amount when I move?
It's quite possible that when you move, you'll change the size of your mortgage, depending on the value of your new home.
If you're taking your original mortgage and Early Repayment Charge terms with you:
- If you need a bigger mortgage, then you can borrow the extra on the basis of any C&G mortgage available at that time.
- If your replacement mortgage is for a smaller amount, you may have to pay part of the Early Repayment Charge based on the difference between the old and the new mortgages.
Bear in mind that before agreeing any replacement mortgage your financial circumstance will need to be checked and we will need to be satisfied that the property you are buying is suitable security for the loan.
What if there's a delay in my move?
Sometimes there can be a gap between moving out of your old home and moving into your new one. If this is the case, you'll have to pay an Early Repayment Charge when you repay the old mortgage but, as long as your new mortgage begins within 12 months of the old one ending, we will refund the charge to you when the new one starts and, if appropriate, carry over the old special terms (e.g. the remainder of any fixed-rate or discount period).
