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What is an early repayment charge?
A quick summary
If you pay off your mortgage early, or overpay by more than your lender allows, you may have to pay an early repayment charge. This is because your lender will consider any interest that was due on the rest of your mortgage agreement.
You might also face an early repayment charge if you remortgage your home with a new lender during the term of your current mortgage deal.
How much is an early repayment charge?
An early repayment charge is usually between 1% and 5% of what you still owe on your mortgage agreement. You can pay your early repayment charge in a lump sum. This often costs less than the amount of interest you’d pay on the remainder of your mortgage.
If you remortgage your home, you may be able to add the early repayment charge onto your new mortgage agreement.
Existing Lloyds mortgage customers
Learn more about our early repayment charges.
When might you pay an early repayment charge?
These are the common reasons when an early repayment charge may apply:
How can you avoid paying an early repayment charge?
There are several steps you can take to avoid paying an early repayment charge.
Get a mortgage without charges
Your lender may offer a mortgage deal without early repayment charges – ask about this when agreeing your deal.
Some fixed rate mortgages don’t include early repayment charges, or you may be able to avoid paying one after repaying for so many years.
Overpay at the right time
Overpaying under the limit each year could help you save money on interest in the long term.
If you have a mortgage with us, you can overpay up to 10% each year. Always contact your lender before overpaying on your mortgage.
Move lenders at the right time
Lenders may waive any charges you might incur for switching lenders if you only have a few months left on your term.
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