FTB, just approved a 3.15% fixed PTSB? good?loan terms?

My husband and I have just received an offer from PTSB for a 2-year fixed rate of 3.15. We received a 3-year rate from ICS for 3.49. We need a 90% of purchase rate, and are worried about interest rates rising. I've heard they're likely to rise .5-1% in the next year. Are these rates a good idea, or would we be better with a tracker or variable rate? Has anyone got a fixed rate and wished they would have gone for another? We are FTBs. And, if we stay in our house for under 5 years, is it wise to go for a 30 or 35 year term, or should we go with a 25 year term?

Thank you. I appreciate your opions.

If you can afford fluctuating repayments and would not be hard pressed to meet the repayments if rates happened to increase by a couple of percent then you might be better off going with a competitive tracker variable rate. Trying to time the market is a mug's game and, in any case, fixed rates are generally priced to reflect expected movements of rates (even if nobody can predict the future with any accuracy). Basically if your finances are tight and you need the reassurance of fixed repayments then accept the fact that you are likely to pay for the privilege but go for it. Note also the longer the mortgage term the more you will pay in interest and mortgage protection life assurance premiums over the long run unless you accelerate repayment of the mortgage when you can (lump sums or increased monthly repayments to chip away at the capital sooner). Don't put yourself under undue pressure to minimise your long term mortgage interest and related costs but don't lose sight of the fact that these costs add up in the long term either! See the best buys for latest mortgage rates. Karl Jeacle's mortgage calculator is useful for seeing how different mortgage scenarios work out in terms of long run costs.

If you do decide to go with the fixed rate, find out what type of rate you go on after this. Normally you can decide a further fixed rate, or you go on the variable rate. This rate may not be the best available to you at that time. Make sure that you have the option to go on the tracker rate when the fixed rate is over. Don't know what rates will be in two years but check around for the bset rate and haggle with your mortgage company to get a better rate.