Early Repayment Charge When You Sell Your House (2026)

By Lisa Hayes · 1 August 2026

If you're selling a house that still has a fixed-rate mortgage on it, you usually have three options: port the mortgage to your next home and keep your rate, pay an early repayment charge (ERC) to settle the loan early, or use a lender waiver if one applies. The ERC is typically 1% to 5% of the balance you still owe, and on a £200,000 mortgage that can be anywhere from £2,000 to £10,000. Whether you pay a penny of it comes down to your deal, your timing and whether you're buying again.

That's the short version. But the detail is where people lose thousands of pounds they never needed to spend, so let me walk you through it properly.

What is an early repayment charge, exactly?

An early repayment charge is the fee your lender applies when you pay off some or all of your mortgage before the agreed deal period ends. Most people meet it in the context of a fixed rate: you locked in a two-year or five-year fix, and now you want out before the clock runs down.

The reason it exists is that your lender priced your deal on the assumption you'd stay for the full term. When you leave early, they lose the interest they were counting on. Under the Financial Conduct Authority's rules, the charge is meant to be a "reasonable pre-estimate" of that cost rather than an arbitrary fine. Lenders don't have to calculate it person by person; they're allowed to set it at product level and apply the same formula to everyone on that deal. You'll find the precise wording in MCOB 12.3 of the FCA Handbook.

Selling your house triggers the charge for a simple reason. On completion day, your solicitor uses the sale proceeds to redeem the mortgage in full. That redemption is the early repayment. It doesn't matter that you're selling rather than remortgaging; the loan gets paid off before the deal was due to end, and the ERC lands.

How much is the early repayment charge when you sell?

Almost always, the ERC is a percentage of the balance you still owe, not the amount you originally borrowed. That distinction matters. If you took out £220,000 five years ago and you've paid it down to £180,000, the charge is calculated on the £180,000.

The percentage usually tapers over the life of the deal. A five-year fix often looks something like this:

These figures are illustrative, not a promise. Some lenders use flat percentages that don't taper. Some charge a fixed number of months' interest. A few tie the ERC to the base rate. And two-year fixes tend to run at lower percentages than five-year ones because there's less remaining term to protect. The only number that counts is the one printed in your own paperwork.

The three ways selling with a fixed mortgage plays out

When you sell during a fixed term, one of three things happens to the mortgage. Knowing which applies to you is the whole game.

Most sellers who are buying again fall into the porting camp. Most sellers who are cashing out entirely, or downsizing to a mortgage-free home, fall into the pay-and-redeem camp. Waivers are the exception rather than the rule, so don't build your plans around one unless your lender has confirmed it in writing.

What is porting and how does it actually work?

Porting means taking your existing mortgage product, and the interest rate attached to it, and moving it onto your next home. Your old loan is repaid when you sell, and a new loan on identical terms is set up against the new property. Because you've kept the same product rather than exited it, the early repayment charge doesn't apply.

Here's the part people miss: porting is not automatic. It isn't a right you tick on a form. It's a fresh mortgage application, assessed against your lender's current criteria. You'll go through affordability checks, a credit check and a valuation of the new property, just as you did the first time round. If your income has dropped, your outgoings have ballooned, or you've picked up adverse credit since, the port can be declined even though you kept up every payment.

Three scenarios come up again and again:

• You're buying at the same price. The simplest case. You port the whole balance onto a like-for-like property and nothing much changes.
• You're buying somewhere more expensive. You port your existing rate on the current balance, and take a second "top-up" loan for the extra you need, usually at whatever rate the lender offers today. You end up with two sub-accounts on one mortgage, often ending on different dates.
• You're buying somewhere cheaper. Downsizing can be the tricky one. If you only need to port part of your balance, the chunk you don't carry across is being repaid early, and the ERC can apply to that portion. Downsizers are caught out by this constantly.

If you're weighing up a move to a smaller property, it's worth reading our full guide to selling a house with a mortgage alongside this one, because the sums change depending on how much of the loan you're keeping.

Porting when your sale and purchase don't line up

In an ideal world your sale and your purchase complete on the same day, the port slots neatly into place, and no charge is ever levied. Real life is messier. Chains break. Purchases slip. Sometimes you sell first and rent for a few months while you hunt for the right place.

This is a "non-simultaneous port", and it's where the ERC gets confusing. If your old mortgage is redeemed on the day you sell but your new mortgage doesn't complete until weeks or months later, the lender takes the ERC at redemption. You pay it. It stings.

The good news is that most lenders operate a porting window. Pay the ERC on sale, choose a new product from their current range, complete your purchase within the window, and they refund the charge. That window is commonly up to six months, though some lenders are meaner and give you as little as 30 days. A handful stretch to a year. The refund is not a favour; it's written into the product terms, and you should hold them to it.

Two rules of thumb here. First, get the window in writing before you commit, and diarise the deadline the moment you complete your sale. Second, understand that a refund means you're out of pocket in the meantime. On a £9,000 ERC, that's £9,000 you can't use for your deposit until it comes back, which can throw a spanner in a tight purchase. Plan your cashflow around that gap.

Can a lender refuse to let you port?

Yes, and this is the risk that keeps me cautious about treating porting as a done deal. Because porting is a new application, the lender can turn it down. The FCA is clear that where a port involves no extra borrowing, it would often be unfair to refuse it purely on affordability grounds, or simply because it's an interest-only loan. That's a genuine protection and worth knowing about if you feel a decision is unreasonable.

But lenders can still say no on other grounds. The most common is the property itself. If the new home pushes the loan outside the loan-to-value band your rate was priced for, or the lender simply won't lend against that type of property, no amount of affordability strength saves the port. Flats above commercial premises, non-standard construction, short leases, properties with structural issues, the very homes people struggle to mortgage anyway, are all places a port can quietly die.

If a lender refuses a port and you believe the reasons don't stack up, you can complain, and ultimately take it to the Financial Ombudsman Service, which will look at whether the decision was fair. Don't just accept a flat "no" if the property is perfectly ordinary and your finances are sound.

Porting versus paying the ERC: the honest trade-off

The instinct is that porting is always the winner because it dodges the charge. Not so fast. With the Bank of England base rate held at 3.75% on 30 July 2026 and inflation at 2.6%, plenty of homeowners are sitting on fixes taken out when rates were higher, and a few are sitting on cheap pandemic-era fixes worth clinging to. If your existing rate is genuinely low, porting protects something valuable. If your existing rate is nothing special, the flexibility of paying the ERC and starting fresh can be worth more than the charge itself.

Where the ERC sits among your other selling costs

It helps to see the charge in proportion. For a lot of sellers it's a meaningful sum, but rarely the biggest line on the page. Estate agent fees, legal costs and, if you're moving up the ladder, stamp duty on the onward purchase often dwarf it. Fixating on the ERC while ignoring the rest is how people talk themselves into bad decisions.

• 1%–5%typical ERC as a share of the balance you owe
• Up to 6 monthscommon lender window to port and reclaim a paid ERC
• £180,000example balance a 3% ERC (£5,400) would apply to
• 3.75%Bank of England base rate, held on 30 July 2026

The point isn't that the ERC doesn't matter. It's that it's one figure in a stack of them, and the sensible move is to work out your net position with every cost included rather than reacting to the scariest-looking percentage.

What about waivers and deals that have already ended?

Two situations remove the ERC from the equation entirely, and they're worth checking before you assume you're liable.

First, if your fixed or discounted deal has already ended and you've slipped onto the lender's standard variable rate, there's normally no ERC at all. You're free to redeem whenever you like. It sounds obvious, but a surprising number of sellers panic about a charge that expired months ago. Check the end date on your deal before you worry about anything else.

Second, some lenders waive the ERC in specific circumstances written into their terms, most commonly on the death of the borrower or, occasionally, in cases of serious financial hardship. These aren't universal and they aren't generous by default, so never assume one applies. If you think you might qualify, ask the lender to confirm it in writing rather than relying on hope.

When paying the early repayment charge is the smart move

I'll say plainly what a lot of brokers won't: sometimes you should just pay the ERC and be done. Here's when that's the right call.

If you're not buying another property, there's nothing to port to. You're redeeming the loan, and the ERC is simply a cost of exiting early. Selling to move into rented accommodation, into care, or to release cash all fall here. The only question is whether waiting a few months until the deal ends would save more than it costs you to wait.

That timing question deserves real thought. If your ERC is £1,800 because you're in the final year of your fix, and your deal ends in four months, sitting tight might save you the whole £1,800. But if holding on means keeping a property that's costing you money every month, an empty inherited house draining you on insurance and council tax, or a sale that could collapse if you delay, then paying £1,800 to complete now can be the cheaper decision overall. Weigh the charge against the cost and risk of waiting, not in isolation.

The other honest case for paying: when porting chains you to a bad situation. If your current lender won't lend on your next home, or the top-up borrowing they offer is uncompetitive, breaking free and paying the ERC can leave you better off than contorting your plans to preserve a rate.

Special situations worth flagging

Selling because of arrears or the threat of repossession

If you're behind on payments, the ERC is usually the least of your worries, and lenders will often deal with a distressed sale differently. What matters most is acting before the situation hardens. There are real options here, and I'd urge you to read our guidance on how to stop repossession before you make any decision under pressure. A fast, certain sale can protect far more equity than clinging on and losing the house to the lender.

Negative equity

If you owe more than your home is worth, the ERC is layered on top of a shortfall, and the maths gets serious quickly. You can't simply port a loan that's bigger than the new property justifies, and paying the ERC deepens the hole. This is its own beast, and our guide to selling a house in negative equity walks through it in detail.

Downsizing to no mortgage at all

Downsizers who plan to buy their next home outright, mortgage-free, can't port anything, because there's no new loan to port onto. That means the full ERC applies to the balance being redeemed. If you're within striking distance of your deal ending, timing the sale to land after the ERC window can be worth tens of thousands in some cases. Do the sums early.

A forced or fast sale

Sometimes speed isn't a preference, it's a necessity: a job move, a relationship breakdown, a chain that's about to implode. If you need certainty over a few months of waiting, a fast house sale or a genuine cash house buyer can complete in weeks rather than months. Factor the ERC into your net figure, but don't let a couple of thousand pounds in charges keep you trapped in a situation that's costing you more in stress and risk.

The mistakes that cost sellers the most

After years of watching people navigate this, the same avoidable errors come up over and over.

• Assuming the port is guaranteed. It isn't. It's a new application. Get a decision in principle for the port before you accept an offer on your home, not after.
• Forgetting the ERC is on the current balance. People panic reading "5%" and calculate it on what they borrowed years ago. It's on what you owe now, which is usually less.
• Missing the refund window. On a non-simultaneous port, the refund only comes if you complete the purchase in time. Diarise the deadline the day you sell.
• Not getting a redemption statement. Estimates drift. The exact figure, dated to your likely completion, is the only one worth planning around.
• Treating the ERC as the only cost. It sits alongside legal fees, estate agent fees and moving costs. Look at your whole net position, which our guide on when you actually get the money when you sell lays out clearly.
• Ignoring the timing lever entirely. If your deal ends soon, waiting can wipe out the charge. If it doesn't, waiting just costs you more. Know which side of that line you're on.

How to work out your own numbers

Forget the generic advice for a moment. Here's the sequence I'd follow if it were my own sale.

• Step one: Dig out your mortgage offer and find the ERC percentage and the dates it applies to. Note the exact date your deal ends.
• Step two: Ask your lender for a redemption statement so you know the settlement figure to the penny, including any admin fees.
• Step three: Get a realistic sense of your sale price. A grounded figure beats an optimistic one every time; our house valuation guide shows how to pin it down.
• Step four: Decide your onward plan. Buying again? Price up a port, including any top-up borrowing at today's rates. Not buying? The ERC is a straight cost of exiting.
• Step five: Run the timing test. Work out what waiting until your deal ends would save, and weigh it against the monthly cost and risk of delaying the sale.
• Step six: Only then decide whether to port, pay, or wait. The right answer is the one that leaves the most money in your pocket and matches how fast you actually need to move.

An early repayment charge feels like a punishment, and emotionally it is. But treated as one number among several in a bigger sum, it's just a line item, and often a smaller one than the fear it provokes. The sellers who lose out aren't the ones who pay an ERC; they're the ones who let the fear of it drive a bad decision, delaying a sale they needed to make or clinging to a lender that no longer serves them.

If you want to see what your home could achieve and what your net position really looks like once the mortgage, the charge and the fees are accounted for, compare your options and start a free valuation. No pressure, no obligation, just the numbers you need to make the call with a clear head.