When Is ERC Actually Incurred

Matt_OX4

LIke many I am currently looking at ending my fix early to get a likely cheaper rate now than would be available when my fix ends at the end of May 2023. My ERC is currently £1,550 but decreases daily. If I apply for a remortgage with another lender, and obtain the maximum 6 month validity of offer that I have seen quoted on this invaluable forum, am I correct to think that the ERC will only be incurred on the day the new lender pays the old lender the funds to end the mortgage, by which time my ERC would be in the low hundreds?

Thanks in advance. 

Edi81

Yes, the ERC is calculated on the day that you repay the mortgage in full. 

CSL0183

Matt_OX4 said:

LIke many I am currently looking at ending my fix early to get a likely cheaper rate now than would be available when my fix ends at the end of May 2023. My ERC is currently £1,550 but decreases daily. If I apply for a remortgage with another lender, and obtain the maximum 6 month validity of offer that I have seen quoted on this invaluable forum, am I correct to think that the ERC will only be incurred on the day the new lender pays the old lender the funds to end the mortgage, by which time my ERC would be in the low hundreds?

Thanks in advance. 

Yes, the day the funds are transferred between lenders. You will be able to start looking 1st December then so you’ll get hit with the next rate rise in November but should avoid the one in December. 

Matt_OX4

Thanks - I'm looking to book a rate now and will just have to take whatever the ERC ends up being. Hopefully no more rises before I get an application in.