I have inherited money that will pay off my mortgage. Should I pay it off?

Simplisticly you have answered your own question when you refer to the early settlement fee. But firstly find what rate of interest you are paying ( maybe .5% ) and then look for what savings rates you could get, ( best at the moment is about 3%). YOU WOULD HAVE TO BE VERY DISCIPLINED, but you could continue paying the mortgage whilst investing the lump sum money ( NO DIPPING ) at 3%
accordingly in the 2 years ahead you pay off the mortgage and have a cheeky bonus. BUT YOU MUST NOT 'DIP INTO THE CASH'.

It might be worth a chat with a financial adviser but its not always worth paying the mortgage off as ourpos says below although I understand the temptation to do so. You probably dont want to risk it but even in a building soc you might make more than you're paying out. When your deal ends you might want to consider an offset mortgage so that the money is still there for you to use if necessay?