Can someone explain early repayment charges on a mortgage please?

[79andnotout]

Hello, I have about 20k left on a mortgage with initial value 150k. I'm looking to buy a place with my partner and sell my house, however I'm only part way into the mortgage deal. Is the 5% fee calculated on the current outstanding amount (20k) or the initial amount I borrowed ten years ago (150k) or some other amount? Thanks for your help!

4.57% fixed until 31.01.2028

Early repayment charges
5.0% until 31.01.2024,
then 5.0% until 31.01.2025,
then 4.0% until 31.01.2026, then 3.0% until 31.01.2027,
then 1.75% until 31.01.2028

Yes someone can explain it - your mortgage provider.

The outstanding amount, but worth double checking that with your mortgage provider! Our annual summary includes it, so if you have that it might show you.

We avoided it when we moved as we got a mortgage with the same provider.

Thank you! Ha, yes, I will be speaking to them but I don't like to enter these conversations blind.

Of the outstanding amount. Your mortgage agreement docs will clearly specify it.

If you have £20K outstanding and they charge 5% for early repayment that's a £1k penalty.

Thanks everybody. So if I paid off a chunk of it (I can do another 10k for this years allowance) then the fee would go down to £500.

I can see mine on the app - it’s a settlement figure. They also charge admin fee as they’ve not had enough in interest.

Yes that’s correct, we’ve just done the same.

Can you not see your mortgage account on-line?

When we had a mortgage (NatWest I think) we could log in and play with the figures which would show updated redemption dates and what ERC (if any) was applicable.
Allowed us to work out if it was worth paying off the mortgage and accepting the ERC or waiting until the fixed rate ended when there was no ERC to pay.
It was only a 2yr fix at 1.1% so we stuck with it and paid it off at the end with no additional charge.
The on-line portal was a great help.

This years allowance is 50% of the balance? Wow that’s a very generous allowance for overpayment. Ours is 10% maximum a year.

I'm with Skipton building society. There's no app and very little online interaction. Just what I pasted in the original post. However, you can pay back 10% of the original borrowed amount, which is very generous, so £15k/year for me.

Our first year with NatWest the max overpayment with no ERC was 10% but the second year it was 20% (2yr fixed rate term).