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No Early Repayment Charge Mortgages: How to Get One
Are you looking for a mortgage that won't penalise you for paying it off early? A mortgage with no early repayment charge might be just what you need.
We are experts in sourcing mortgage finance on residential and buy to let property transactions in the UK - We provide high quality mortgage solutions for UK and international clients.
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- No early repayment charge mortgage options for residential and buy to let
- Bridging finance options from 0.44% pm (3 to 12 months)
- Up to 95% loan to value (residential mortgages)
- Up to 80% loan to value (buy to let mortgages)
- Expertise in dealing with buy to let portfolios and capital raising
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- Maximising borrowing e.g. mortgages for professionals, lenders that will allow 5x up to 6x salary
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- Equity release for over 55s - Solutions for releasing capital in retirement e.g. home improvements, boosting income, mitigating IHT, raising a home deposit for children/grandchildren
Here, in this blog, we’ll take a look at these flexible financial products and explore their benefits, potential drawbacks, and how to find the best option for your needs.
What is a Mortgage with No Early Repayment Charge?
Types of No ERC Mortgages in the UK
Benefits of Choosing a Mortgage with No ERC
How ERCs Work: A Quick Overview
Finding the Best No ERC Mortgage Option
Is a Mortgage with No Early Repayment Charge Right for You?
Need Help Finding the Right Mortgage?
What is a Mortgage with No Early Repayment Charge?
A mortgage with no early repayment charge (ERC) is exactly what it sounds like - a home loan that doesn't impose penalties if you decide to pay off your mortgage ahead of schedule or make substantial overpayments. This type of mortgage offers borrowers more freedom and control over their financial future.
Types of No ERC Mortgages in the UK
Several mortgage products typically come without early repayment charges:
Tracker Mortgages
These variable-rate mortgages usually follow the Bank of England base rate. While they offer flexibility with no ERCs, your monthly payments may fluctuate as interest rates change.
Related: Should You Get a Tracker or Fixed Rate Mortgage in 2024?
Offset Mortgages
Offset Mortgage products link your savings account to your mortgage, potentially reducing interest payments. They often come without ERCs, allowing you to benefit from lower interest rates and the ability to overpay without penalties.
Discounted Rate Mortgages
These mortgages offer a discounted interest rate for an agreed period and typically come without ERCs.
Standard Variable Rate (SVR) Mortgages
Set by individual lenders, SVR mortgages generally have no ERCs. However, they often come with higher interest rates compared to other mortgage options.
Benefits of Choosing a Mortgage with No Early Repayment Charge
- Flexibility: You can repay your mortgage early or make substantial overpayments without incurring fees.
- Potential for Savings: If you come into a large sum of money, you can use it to pay off your mortgage without penalty, potentially saving on long-term interest.
- Easy Exit: If you need to sell your property or switch to a different mortgage product, you can do so without facing hefty charges.
- Peace of Mind: Knowing you won't be penalised for managing your finances proactively can provide significant peace of mind.
What to Look Out For with No ERC Mortgages
While mortgages with no early repayment charge offer many advantages, there are some potential drawbacks to consider:
- Higher Interest Rates: These mortgages often come with slightly higher interest rates to compensate for the increased flexibility.
- Variable Rates: Many no ERC mortgages are variable rate products, which means your monthly payments could increase if interest rates rise.
- Stricter Eligibility: Some lenders may have stricter criteria for no ERC mortgages, potentially making them harder to obtain.
Top 2 Year Tracker Rate (60% LTV) Fixed until 31 May 2022 Subsequent rate 3.35% variable Product Fee £999 Interest only - Yes £250 Cashback or Free Standard Valuation** No Early Redemption Charge As at 26 March 2020 **Subject to terms Top 5 Year Fixed Rate (65% LTV) Fixed until 30 June 2025 Subsequent rate 4.49% variable Product Fee £499 Free Standard Valuation & Legals** No Early Redemption Charge Unlimited overpayments As at 26 March 2020 **Subject to terms Top 5 Year Fixed BTL Rate (65% LTV) Fixed until 31 Oct 2025 Subsequent rate 4.49% variable Product Fee £1999 Interest only - Yes Free Standard Valuation & Legals** No Early Redemption Charge As at 26 March 2020 **Subject to terms Thank You for your interest - please complete the form below and a member of our team will be in contact.Residential Remortgage - 2 Year Tracker Deal
No ERCs - Will Be Withdrawn Soon!
1.19% APR initial rate
APRC 3.2%*
Residential Remortgage - 5 Year Fixed Deal
No ERCs
1.80% APR initial rate
APRC 3.5%*
Buy To Let Remortgage - 5 Year Fixed Deal
No ERCs
2.05% APR initial rate
APRC 3.8%*
Contact Us
*Overall Cost For Comparison
How ERCs Work: A Quick Overview
To understand the value of a mortgage with no early repayment charge, it's helpful to know how ERCs typically work:
ERCs often decrease over time. A 5-year fixed-rate mortgage might have ERCs structured like this:
Finding the Best No ERC Mortgage Option
To find the best mortgage with no early repayment charge, consider these steps:
- Compare Total Costs: While avoiding ERCs is beneficial, ensure the overall cost of the mortgage (including interest rates and fees) is competitive.
- Assess Your Situation: Consider whether you're likely to need the flexibility of a no ERC mortgage. If not, a fixed-rate mortgage with lower interest rates might be more suitable.
- Use a Broker: A mortgage broker can provide access to a wide range of products, including those only available through intermediaries. They can help you navigate the complexities of the mortgage market and find the best deal for your circumstances.
- Check Multiple Lenders: Several UK banks and building societies offer mortgages without early repayment charges, including HSBC for Intermediaries, Barclays, TSB, Skipton Building Society, and Nationwide for Intermediaries.
The Power of No ERC Mortgages
Let's look at an example to illustrate the potential benefits:
This overpayment reduces her loan term by over 5 years and saves her more than £30,000 in interest over the life of the mortgage.
Is a Mortgage with No Early Repayment Charge Right for You?
A mortgage with no early repayment charge can offer valuable flexibility, especially if you expect your financial situation to improve or change in the near future. However, it's crucial to weigh this flexibility against potentially higher interest rates.
Remember, while no ERC mortgages offer flexibility, they may not be the best choice for everyone. It's crucial to carefully consider your financial situation and long-term plans before deciding on a mortgage product.
Need Help Finding the Right Mortgage?
At Clifton Private Finance, we specialise in helping clients find the perfect mortgage solution, including mortgages with no early repayment charge. Our expert advisors can guide you through the process, ensuring you make an informed decision that aligns with your financial goals.
Our dedicated team specialises in finding competitive mortgage options tailored to your unique financial situation, including mortgages with no early repayment charges.
Unlock the benefits of our mortgage advisory service, including:
- Access to exclusive no ERC mortgage deals
- Competitive rates from a wide range of lenders
- Swift application process – get your mortgage offer faster
- Expert advice on choosing between ERC and no ERC options
- Professional guidance throughout your mortgage journey
Explore the possibilities for your property financing. Call us at 203 880 8890 or book a free consultation below to discuss how a mortgage with no early repayment charge could benefit you.
Remember, making the right mortgage choice can save you thousands of pounds over the life of your loan. Let our experts help you make an informed decision.
