Pay off mortgage

TINET

Hi, need some advice,
 I have £55000 balance left on my mortgage with 2 years 5 months left on my fixed rate at 1.5%. I have received £50000 and put it in my savings account at 4%.
Should I use it to clear the mortgage this month or not.
There is an early repayment charge of £2000. Please advise. 

Hoenir

No. Wait until the fixed term period ends and there's no fee to pay. 

Veteransaver

No, not worth paying off the mortgage.
If you haven't done so it's probably worth putting £20k in cash ISA now, and then another £20k after 5th April. You can get around 5% if you fix for a year too.

Zerforax

I understand the attraction of just getting the mortgage paid off and feeling free!

But saving on the £2,000 early repayment charge and also earning extra interest on the 50k in the meantime would pay for a holiday!

South_coast

Agreed. You could repay the maximum fee-free amount in the meantime if that made you feel like you were doing something towards it? Might bring down your monthly payments too, depending on your T&Cs

Archerychick

you would earn quite a bit more in interest than you would save, let alone factoring in the ERC.

Have you made use of your isa allowance for this year? If not you still have time to put £20k in for this years allowance and then another £20k in the new tax year then your interest will all be tax free. That would leave £10k in your savings account 

TINET

Thank you members for the advice, its helped clear my doubts.