Can I Switch Mortgage Without Paying An Early Repayment Charge?

An ERC is a penalty for leaving your mortgage deal before the fixed period ends.

It is calculated as a percentage of your outstanding mortgage balance, and it steps down each year of your deal.

A typical structure on a 5-year fix looks like this:

On a £200,000 mortgage in year one, that is a £10,000 charge. In year five, it drops to £2,000. These are significant sums and, in most cases, not worth paying.

Wait until your deal ends

The most straightforward option. Most lenders let you lock in a new rate up to six months before your deal ends, with the switch completing on the final day of your current deal. You pay no ERC and lose no time.

Product transfer with your existing lender

Switching to a new deal with your current lender does not count as early repayment, so no ERC applies. You can do this at any point, including while you are still mid-deal. The downside is you are limited to your existing lender’s rates.

Porting your mortgage

If you are moving house, many lenders allow you to take your existing mortgage with you to the new property. This is called porting. You keep your current rate and avoid the ERC. You may need to borrow more on top, which would be at a new rate. Not all lenders allow porting, and the new property still needs to meet the lender’s criteria.

Use your overpayment allowance

Most lenders allow you to overpay up to 10% of your outstanding balance per year without any ERC. This does not let you leave the deal, but it reduces your balance before you remortgage, which can improve your LTV and unlock a better rate when your deal does end.

In some cases, leaving early and paying the charge is the right call. If you are moving house and cannot port, if rates have fallen significantly and the long-term saving outweighs the charge, or if your circumstances have changed and you need to change the mortgage term, the maths can tip in favour of paying the ERC.

A broker can calculate the break-even point for your specific deal in a matter of minutes.

Find an FCA-regulated mortgage broker through our broker matching service.

Sources: HSBC mortgage ERC guidance; Principality Building Society; Manor Mortgages 2026; FCA KFI disclosure requirements. Your home may be repossessed if you do not keep up repayments on a mortgage. This article is for information only and does not constitute financial advice.