Mortgage guide
Mortgage overpayment limits and ERCs explained
A fixed deal can make your payment predictable, but it can also set rules for paying the mortgage off faster. Check those rules before sending extra money.
The common 10% allowance
Many lenders let you overpay up to 10% a year without an early repayment charge (ERC), but it is not a universal rule. The allowance might be based on your original loan, current balance or a different figure. Your mortgage offer and lender’s current terms always take priority over an online rule of thumb.
Why the reset date matters
An allowance does not always reset on 1 January. It may run by calendar year, mortgage year, fixed-deal year or another period set by the lender. A payment that is within the allowance in one month could exceed it in another, so confirm the amount still available and the reset date before making a lump sum.
What an ERC is
An ERC is a charge a lender may make if you repay more than allowed or leave a deal early. The charge, timing and calculation are specific to the mortgage. Ask for the exact charge for the payment you are considering; do not rely on an estimate from another lender or a generic calculator.
Questions to ask your lender
- How much can I overpay without an ERC?
- What is the allowance based on?
- When does it reset?
- Will the payment reduce my term or monthly payment?
- What would the charge be for the amount I am considering?
Test the monthly amount
Use the calculator for a clear illustration, then confirm the rules with your lender.
Try the calculator