Managing your international mortgage payments
Understand how early repayment changes may affect your mortgage and how to make overpayments.
Early repayment charges
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We offer a range of mortgage products, each with its own interest rate and terms. Some of these products may include an early repayment charge, a fee that applies if you repay all or part of your mortgage within a specified period.
ERCs are designed to cover costs associated with early repayment and will vary depending on your mortgage type. Full details of any applicable charges will be clearly outlined in your mortgage offer letter.
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An early repayment charge may apply if you:
- repay all or part of your mortgage before the end of the ERC period
- request to transfer all or part of your loan to a new mortgage product, and we agree to the change.
The charge will never exceed the maximum amount stated in your Mortgage Illustration and offer letter, and is calculated based on:
- whether you’re repaying the full loan or just a portion
- the outstanding balance at the time of repayment.
If you request a redemption statement, we recommend waiting until the date shown on the statement before making any payment - paying earlier could result in an ERC being applied.
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Yes, there are a few important exceptions and concessions:
Annual overpayment allowance
Each calendar year, you can make regular or lump-sum overpayments of up to 10% of the outstanding loan balance as of 1st January without incurring an ERC. This applies to any mortgage product where ERCs normally apply.
Overpayments above 10%
If your total overpayments exceed the 10% allowance, an ERC will only be charged on the portion that goes beyond the 10%.
Full repayment after overpayment
If you repay your loan in full within six months of making a regular or lump-sum overpayment, you’ll be required to pay the full ERC, including any portion previously waived.
Policy changes
We may change or withdraw the 10% overpayment concession. If you're planning to make overpayments, it's best to contact us first to confirm the current policy. We’ll give at least three months’ notice before making any changes.
Porting your mortgage
If you're moving home and transferring your mortgage product (including the rate and ERC terms) to a new property, you won’t have to pay an ERC. This process is known as porting.
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This example is based on five full or part years remaining, so a 5% charge is applied. If you had 3 full or part years remaining, a 3% charge would be applied.
Amount you owe
£50,000
Amount you owe
Percentage early repayment charge payable
£50,000
5%
Amount you owe
Total early repayment charge payable
£50,000
£2,500
Amount you owe
Amount you repay early
£50,000
£25,000
Amount you owe
Total early repayment charge payable
£50,000
£1,250
Regular overpayments
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Regular overpayments are extra payments you make on top of your standard monthly mortgage instalments. These payments directly reduce the outstanding balance of your mortgage.
If your mortgage uses our Daily Interest method, regular overpayments can also reduce the amount of interest you pay. That’s because interest is calculated daily on your remaining balance - so once the overpayment is applied, interest is charged on a lower amount from that day forward.
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You can set up regular overpayments by increasing the amount you pay each month towards your mortgage. To do this, simply ask us to collect an additional amount along with your standard monthly payment.
Any extra payments received will be automatically spread across all parts of your mortgage, helping to reduce your overall balance and potentially the interest you pay.
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You may need to pay an early repayment charge if you make a regular overpayment during a period when ERCs apply. Your mortgage offer letter will confirm whether ERCs apply to your product and how long the charge period lasts.
If an ERC concession is in place at the time of your overpayment, you’ll only be charged on the portion that exceeds the concessionary limit - typically up to 10% of your outstanding balance per calendar year.
Important:
Any lump-sum overpayments made during the year will count towards your 10% ERC concession. If your total overpayments exceed this limit, ERCs will apply only to the excess amount.
Lump-sum overpayments
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A lump-sum overpayment is a one-off extra payment you make towards your mortgage, separate from your regular monthly payments.
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You can make a lump-sum overpayment by visiting your local branch or using the contact form. When you do, we’ll ask whether you’d like us to recalculate your monthly payments based on your reduced mortgage balance. We won’t automatically adjust your monthly payment, you’ll need to request this.
Even if you choose not to recalculate your monthly payments, your lump-sum overpayment will still reduce the amount of interest you pay over the life of your mortgage, as it lowers your outstanding balance.
If your mortgage uses our Daily Interest method, we’ll stop charging interest on the overpaid amount from the day we apply the payment.
You can also let us know if you’d prefer to:
- reduce your monthly payments while keeping the mortgage term the same
- shorten your mortgage term - for this option, you’ll need to speak with one of our Mortgage Arrangers, who will assess your needs and circumstances.
If you have an interest-only mortgage, you may request a reduced term, but only if you can demonstrate that your repayment plan(s) will generate sufficient funds to repay the loan earlier than originally agreed.
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It depends on your mortgage product. Some of our mortgages include an early repayment charge if you repay all or part of your loan within a specified period. Your offer letter will confirm whether ERCs apply and how long the charge period lasts.
If an ERC is payable, we’ll deduct it from your lump-sum overpayment.
ERC concession
If an ERC concession is in place when you make your lump-sum overpayment, you’ll only be charged on the portion that exceeds the concessionary limit - typically 10% of your outstanding balance as of 1 January.
For example, if your mortgage balance was £100,000 on 1 January, you could overpay up to £10,000 that year without incurring an ERC. If your total overpayments exceed this amount, the ERC will apply only to the excess.
Important notes
Regular overpayments made during the year count towards your 10% ERC concession.
Underpayments
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An underpayment occurs when you pay less than your agreed monthly mortgage amount. You must not underpay unless you have received explicit permission from us.
Whenever we recalculate your monthly mortgage payment, we take into account any overpayments you’ve made. These overpayments help reduce your outstanding balance and may lower your future monthly payments - but they do not give automatic permission to underpay.
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If you’d like to make underpayments, paying less than your usual monthly mortgage amount, you’ll need to speak with us first.
Call us
from the UK 03457 449900 or
from outside the UK +44 (0) 1539 736 626
Lines are open 8am to 6pm Monday to Sunday and closed UK bank holidays. You’ll then be able to ask for an International mortgage manager to call you back during office opening times.
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