Question 1

What is an early repayment charge on a mortgage?

Accepted Answer

An **early repayment charge (ERC)** is a fee for repaying more of your mortgage than the lender permits, or repaying it entirely, **during a fixed or discounted deal period**.

**Why it exists.** When a lender offers a fixed rate, it typically hedges that commitment by securing funding at a matching cost for the same period. If you repay early, the lender is left with the funding arrangement and no loan. The ERC compensates for that, and is why fixed rates can be offered at all.

**How it is calculated.** Usually a **percentage of the amount repaid**, and typically **tapering** over the deal — for example 5% in year one, falling by a percentage point each year to 1% in year five. Some lenders charge a flat percentage throughout. The charge applies to the balance **at the point of repayment**, and on a large mortgage it can be a very substantial sum.

**The overpayment allowance.** Almost all fixed deals permit overpayments of up to a stated amount each year — commonly **10% of the outstanding balance**, though it varies and some lenders base it on the original balance instead, which matters. Overpay within that and there is no charge.

**When an ERC is triggered:**

**Repaying the mortgage in full**, including on sale, unless you port.

**Remortgaging to another lender** before the deal ends.

**Overpaying above the allowance**, on the excess.

**When it usually is not:**

**Porting.** Most deals allow you to take the mortgage to a new property, subject to fresh affordability and valuation checks. **Porting is not a right in practice** — you must requalify, and people are refused.

**Switching to a new deal with the same lender** at the end of the term, or sometimes shortly before.

**The arithmetic worth doing.** If rates have fallen considerably, paying an ERC to move can still be worth it. Compare the charge against the total saving over the remaining period, including any product fees — a broker can model this, and the answer is not always what people assume.

**Check the timing.** Many deals allow switching in the final months without charge, and ERC periods end on a specific date, not on a whole month.

General information, not financial advice.

Question 2

Is a mortgage in principle a guarantee that you'll get the loan?

Accepted Answer

No. A mortgage in principle — also called an agreement in principle, decision in principle, or AIP/DIP — is an indication of what a lender might be willing to lend based on information you have

Question 3

How to choose the right mortgage lender?

Accepted Answer

Choosing the right mortgage lender involves comparing interest rates, loan types, fees, customer service, pre-approval processes, and processing times to find the best fit for your financial needs.

Question 4

What does a mortgage broker do, and how are they paid?

Accepted Answer

A broker assesses your circumstances, searches lenders, recommends a product and manages the application. How they are paid determines whose interests the advice serves, which is the question worth

Question 5

What actually happens in a repossession?

Accepted Answer

A court process, not something a lender can simply do — and the most important practical fact is that repossession is treated as a last resort, with several stages at which it can be stopped,

Question 6

What is equity release, and what does it actually cost?

Accepted Answer

Borrowing against the value of your home without moving, with nothing repaid until you die or move into long-term care — and the cost is dominated by compounding interest over a very long period,

Question 7

What does porting a mortgage mean?

Accepted Answer

Porting means transferring your existing mortgage deal — the rate and its terms — to a new property when you move, rather than repaying it and taking a new one. Why anyone would want to. Two reasons:

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