Pay off lump sum and incur an ERC or wait?

DNK

Hi all

In a nut shell, I'd like to know if it's worth paying off a chunk (£30k) of my mortgage and incur the ERC which is 5% of any amount paid (in this case £1500.)
OR wait 26 months until the deal ends and I go onto their variable and pay off what I want without incurring any charges.

£124K over 23 years
5 year fixed at 5.89%
Have 26 months left of this deal.
Been paying £1300pm (£800 + the max allowed overpayment of £500) for the past 16 months or so.

If I didn't pay this sum now, I'd invest the £30K but only for 2 years, probably in something like a fixed rate savings account (unless someone can advise of anything better.)

I've been trying to work out the potential interest saved on the mortgage over the 26 months minus the ERC and comparing it to interest made on the £30K over the 2 years and there doesn't seem to be much in it but I'm not sure I've done my maths correctly.

Any help would be appreciated.

Cheers.

getmore4less

Is the £500pm coming from the capital or from spare income?

Engeroosi

how much is the erc if you buy out of the fixed rate? might be worth just re-mortgaging to a lower interest rate or an offset.