Redemption Penalties (RP) are fees imposed by lenders in the UK housing market when a mortgage is paid off before the end of the agreed term. These fees are also known as early repayment charges (ERC) and are designed to protect the lender from losses associated with borrowers refinancing or repaying a loan early. The amount of the penalty can vary depending on the loan agreement, but typically ranges from 1-5% of the outstanding balance. The purpose of Redemption Penalties (RP) is to ensure that lenders are compensated for the costs associated with the loan, such as administrative costs and lost interest payments due to early repayment. The scope of Redemption Penalties (RP) applies to all types of mortgage loans in the UK, including fixed rate and variable rate mortgages, and can be imposed regardless of the reason for the early repayment.