Worth paying the ERC or wait 2 years?

Mentox

I am sure this question has been asked already or that my question is way too simple but I couldn't find the answer.

My mortgage is a little below 140.000 and I have 9000 that I could put towards the mortgage and still have a decent backup.

I have 3 year fixed that ends in March 2015 so roughly 20 months. Any overpayments will have an ERC of 3%. The interest rate is 3.99% at the moment so I am wondering if it is worth making the overpayment or wait until March 2015?

In my head it seems to be worth it as I will lower the mortgage and not pay 3.99% per year on the amount reduced. However I couldn't come up with a calculation to support my idea and I am sure the banks have something that I didn't think about.

Thrugelmir

Over 20 months you'll save £600 in interest.

The ERC will cost you £270.

On an instant access ISA at 2% you'll earn £300.

So the net saving will in the region of £30-£40.

Mentox

Thrugelmir wrote: »

Over 20 months you'll save £600 in interest.

The ERC will cost you £270.

On an instant access ISA at 2% you'll earn £300.

So the net saving will in the region of £30-£40.

Thanks for your reply Thrugelmir, especially the interest I would get from the ISA is helpful.

I will keep the savings for now as extra security instead of saving ~40 pounds.