see also Early Redemption Fees and Higher Early Redemption Fee. This is a charge made by a lender if the mortgage is repaid within a set time period, normally in the early years of a mortgage these are now quite usual as many borrowers are opting for fixed rate and discounted rate mortgages. The penalties are usually in the form of a set number of months interest within the agreed early redemption period. As an example, if a borrower repays a mortgage within three years they may have to pay four months interest. When taking out a mortgage, borrowers should be aware of these penalties.

(Also see "Early Repayment Charges"). These are the expenses charged by a lender for the general administration involved in closing your account if it occurs before the completion of the agreed term.