diff --git a/drivers/net/ethernet/mellanox/mlx5/core/en/tc_tun.c b/drivers/net/ethernet/mellanox/mlx5/core/en/tc_tun.c
index 668da5c70e63..8bca696b6658 100644
--- a/drivers/net/ethernet/mellanox/mlx5/core/en/tc_tun.c
+++ b/drivers/net/ethernet/mellanox/mlx5/core/en/tc_tun.c
@@ -403,12 +403,16 @@ int mlx5e_tc_tun_update_header_ipv4(struct mlx5e_priv *priv,
 	if (err)
 		goto free_encap;
 
+	e->encap_size = ipv4_encap_size;
+	kfree(e->encap_header);
+	e->encap_header = encap_header;
+
 	if (!(nud_state & NUD_VALID)) {
 		neigh_event_send(attr.n, NULL);
 		/* the encap entry will be made valid on neigh update event
 		 * and not used before that.
 		 */
-		goto free_encap;
+		goto release_neigh;
 	}
 
 	memset(&reformat_params, 0, sizeof(reformat_params));
@@ -422,10 +426,6 @@ int mlx5e_tc_tun_update_header_ipv4(struct mlx5e_priv *priv,
 		goto free_encap;
 	}
 
-	e->encap_size = ipv4_encap_size;
-	kfree(e->encap_header);
-	e->encap_header = encap_header;
-
 	e->flags |= MLX5_ENCAP_ENTRY_VALID;
 	mlx5e_rep_queue_neigh_stats_work(netdev_priv(attr.out_dev));
 	mlx5e_route_lookup_ipv4_put(&attr);
@@ -669,12 +669,16 @@ int mlx5e_tc_tun_update_header_ipv6(struct mlx5e_priv *priv,
 	if (err)
 		goto free_encap;
 
+	e->encap_size = ipv6_encap_size;
+	kfree(e->encap_header);
+	e->encap_header = encap_header;
+
 	if (!(nud_state & NUD_VALID)) {
 		neigh_event_send(attr.n, NULL);
 		/* the encap entry will be made valid on neigh update event
 		 * and not used before that.
 		 */
-		goto free_encap;
+		goto release_neigh;
 	}
 
 	memset(&reformat_params, 0, sizeof(reformat_params));
@@ -688,10 +692,6 @@ int mlx5e_tc_tun_update_header_ipv6(struct mlx5e_priv *priv,
 		goto free_encap;
 	}
 
-	e->encap_size = ipv6_encap_size;
-	kfree(e->encap_header);
-	e->encap_header = encap_header;
-
 	e->flags |= MLX5_ENCAP_ENTRY_VALID;
 	mlx5e_rep_queue_neigh_stats_work(netdev_priv(attr.out_dev));
 	mlx5e_route_lookup_ipv6_put(&attr);