Which rate should I choose?

The recent rate increase has changed our original offer as the mortgage hasnt been drawn down yet.

The revised offer from the ICS is (on a 370,000 mortgage)

1 yr discount tracker of ECB + 0.85% = 3.10% at present = E1453.94/mth 2 yr discount tracker of ECB + 0.95% = 3.20% at present = E1475.51/mth

both will roll to tracker ECB + 1.25% = 3.5% at present = E1541.35/mth

or you can fix for 2 yrs = 3.85% = E1620.27/mth

If the rates rise by another .75% then the 1yr discount tracker seems a better bet, compared with the 2yr fixed. However, there is a trend and predictions that rates may continue rising next year. In this case the 2yr fixed seems the best rate.

I realise you take a gamble either way but I cant decide.

Only fix if you need to - otherwise go for the best deal tracker. Check out the many "fixed or variable" threads for more on this.

Just to confuse you even more - have you seen Bank Of Scotland discounted tracker offer [broken link removed]

Jaydee,

I have a feeling they will change again. They do not reflect the latest increase of the ECB which comes into effect today. I got the same offer from them about 3 weeks ago. But either way, I've worked out that if you went with their normal tracker of 3.35 (APR 3.4), which is ECB+1.1 from the very start you'd pay less than with a one year reduced tracker followed by a tracker +1.25.
But there was a post here today about tracker vs 2 year fixed rate, and some very good thoughts there. Also check out PTSB. They are slightly better on a fixed rate than ICS, whereas tracker, they're pretty much the same. Although this will all change now with the latest 0.25% increase, so all the figures above are "old".

I fixed with NIB for 2 yrs 3.29, as I believe rates will continue up to at least another .75 by next 12 mths