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Early Repayment Charge

A financial penalty for repaying part or all of the mortgage before an agreed date. It is often applied to fixed, discounted, tracker, capped and cash-back mortgages. Quite simply, the lender agrees to offer what it believes is an exceptional package of benefits, providing the borrower agrees to keep the mortgage with them for an agreed length of time.

Endowment


A savings plan with built-in life assurance which on maturity can help repay an "interest-only" mortgage.

Exchange of contracts


The date at which both parties confirm the purchase/sale of the property through solicitors. The purchase is then legally binding. The buyer is responsible for the new property's buildings insurance.

Extended tie-ins


This is where the early repayment charge applies even after the scheme date has finished. It means, in effect, that the lender, in exchange for what it believes is an exceptional scheme, requires the borrower to keep the mortgage with them after the scheme has ended, for a set period of time.



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