Mortgage early repayment charges: are they worth the cost?

With interest rates set to rise further in the months ahead, is it worth swallowing early repayment charges to refinance your mortgage today?

Bank of England
The Bank of England could raise the interest rate to 5.75% next year
(Image credit: © Scott Barbour/Getty Images)

Switching to a better mortgage deal or paying off a mortgage earlier can be a sensible financial decision. However, most lenders will demand early repayment charges if you try to change your loan before the deal term ends.

But with interest rates set to hit 5.75% next year according to City analysts, switching today and swallowing the extra repayment charge could save you thousands of pounds on your mortgage repayments.

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Rupert Hargreaves
Contributor and former deputy digital editor of MoneyWeek

Rupert is the former deputy digital editor of MoneyWeek. He's an active investor and has always been fascinated by the world of business and investing. His style has been heavily influenced by US investors Warren Buffett and Philip Carret. He is always looking for high-quality growth opportunities trading at a reasonable price, preferring cash generative businesses with strong balance sheets over blue-sky growth stocks.

Rupert has written for many UK and international publications including the Motley Fool, Gurufocus and ValueWalk, aimed at a range of readers; from the first timers to experienced high-net-worth individuals. Rupert has also founded and managed several businesses, including the New York-based hedge fund newsletter, Hidden Value Stocks. He has written over 20 ebooks and appeared as an expert commentator on the BBC World Service.