Early Redemption Charge

This is a charge made by your mortgage lender which is payable on certain types of loan - usually discounted or fixed interest rate loans. The charge is only applied if the loan is redeemed or part-redeemed within the specified early redemption charge period.

Some lenders lock you in to a three or six month redemption charge - you've been warned, if someone is offering you an incredibly good interest rate below the rate prevailing on variable rate mortgages, the chances are they want something - your loyalty, and that could mean it'll cost you if you decide to move lender in future.

Back to Jargon Buster