A fee a mortgage lender charges if you pay off some or all of your mortgage during a fixed or discounted rate period — for example, by switching to a new lender, selling the property, or making a large overpayment above your allowance. The charge is usually a percentage of the amount you're repaying, and it can run into thousands of pounds. ERCs matter in divorce settlements because they reduce the net proceeds if the family home is redeemed or transferred early — for instance, when one party takes over the mortgage or the property is sold to divide the equity. The court looks at the net figure (after the ERC and other selling costs), not the gross redemption figure, when valuing what's actually available to divide.
In Plain English
A fee charged by a bank if you pay off your mortgage or sell your house earlier than agreed in your contract. The court takes this fee into account because it reduces the actual cash you get from a house sale.
Navigating court alone?
A McKenzie Friend can help you understand terms like these in the context of your case.
Find your supportWe use essential cookies only to provide you with the best experience on our website. No tracking or analytics cookies are used.