An early repayment charge is the price of leaving a loan before the lender expected you to. It usually applies during a fixed or discounted rate period, and it is charged when you pay off the balance, move to another lender or remortgage, or pay off more in one go than the contract allows.
In Britain the rule is set by the Financial Conduct Authority. Under MCOB 12.3.1R a lender may charge one only if it can be stated as a cash amount and is a reasonable pre-estimate of the costs your early repayment causes it. Lenders often express it as a percentage of the amount repaid, so on a £180,000 balance a 3% charge would be £5,400. When you switch lender without borrowing more, the new lender's affordability check ignores the charge, and the firm must warn you that it has, under MCOB 11.9.
Elsewhere it goes by other names. In the United States it is a prepayment penalty: the CFPB says some lenders charge one if you pay off all or part of the loan early, typically within the first three or five years, and that not every mortgage has one. In Australia a fixed-rate home loan may carry a break fee, which Moneysmart lists among the costs of switching.
The charge is separate from an exit or discharge fee, a small flat administration charge for closing the account, and it does not touch the allowance most British lenders give you during a fixed deal to overpay 10% to 20% of the balance each year at no cost, which the FCA found was the norm.
Neither the loan calculator nor the mortgage calculator adds an early repayment charge. Before you clear a loan early, weigh the interest saved that they show against the charge in your offer document.