Paying off a Mortgage quickly

Shed78

We took up a mortgage with Nationwide on July 31st last year and are now in a position to pay the whole thing off (8 months later). On the contract it says if we pay early we have to pay a £90 admin fee plus 2% of the loan, divided by 24, multiplied by the number of months left on the fixed term (15 months), along with the outstanding balance, obviously.
This gives us a total in the region of £750.
Does this sound correct?
When we were sold the mortgage, the broker initmated that it would be tough and expensive to get out of a 2 year fixed term mortgage and made us suspicious of this seemingly "low" fee.
Any help/comments appreciated.

Jono

Can you put the money in a higher interest (than the mortgage) account (ISA for example)? Is the penalty for two years? Is it free after the two years?

Scott

How much is left on your mortgage? What rate do you have?

MarkyMarkD

If your mortgage was for £60k then I can understand that figure of £750 being correct.

2% isn't THAT low; 3% is common. But the fact that it reduces pro-rata for the number of months elapsed does make it cheaper than most other lenders.

Scott

It may work out as cheaper for you to pay the early repayment charge on your mortgage rather than wait out the remaining term and have interest gather on your balance, since it's usually quite difficult to "outpace" your mortgage interest in a savings account.

MarkyMarkD

As Scott says, it is unlikely you are going to beat your mortgage rate on an amount like £60k because it will mainly be taxable income.