Shawbrook Bank has amended its early repayment charge (ERC) structure, removing the 1% overhang on term loans after five years of payments as part of its commitment to transparent lending.
Previously the bank would charge an ERC of 1% of the loan if it was repayed after the initial five years of payments and before the end of the deal.
The bank has revamped this structure, with ERCs now ending at year five for all new formal offers issued by the bank.
Karen Bennet, sales and marketing director of commercial mortgages at Shawbrook, said the changes are in response to broker and client feedback.
“Any feedback that helps us improve our ability to transact business is always welcome,” said Bennett.
“In this circumstance, we are confident that this update is another positive step on our broader path towards process and product improvement.”
ERCs on term loans apply at 3% for the first two years of a three-year loan, and the first four years of a five year loan, before dropping to 1% for the final year of the fix.
Loans of between 10 and 30 years will have an ERC applied at 3% for the first five years.