Broker InsightmortgagesERCBRRR
Early Repayment Charges: The Exit Cost Nobody Models
ERCs can cost 1–5% of the outstanding balance if you exit a fixed-rate mortgage early. On a £500,000 loan, that's up to £25,000. Investors refinancing on the BRRR cycle frequently get caught by ERCs they didn't model.
Every fixed-rate product has an ERC schedule. A 5-year fix might charge 5% in year one, 4% in year two, declining to 1% in year five. If your BRRR refurbishment completes faster than expected and you want to refinance to a BTL product at month 8 of a 24-month fix, the ERC is likely 3–4% of the balance — often wiping the refinance profit entirely. A specialist broker selects products aligned to your realistic project timeline, factoring ERCs into the total deal model.