Please help me decide between tracker mortgage and fixed rate

Radiantsoul

Assuming that all other things are equal it seems that tracker is better if interest rates remain where they are or rise by less than 1% immediately. If interest rates are to rise by 2% next year then it is quite likely the fixed rate will have turned out to be better value.

I would probably go with the tracker if you have the headroom in your budget, but save the difference between the fixed and tracker rates payments as a form of insurance against rate rises(or overpay). It seems to me that the tracker is slightly better value as I suspect that the next two years are likely to see interest rates being subdued.

ItsMe

Thanks to all who bothered to reply and vote. Just in case you're interested I went for the tracker in the end and chose a higher monthly payment than first quoted. It is still £100 less than I'm paying now and means I've knocked another year off the term. This means that if the rate goes up I can extend the term (apparently no fees for doing this) and keep my payments the same - so I feel like I have a safety net.

Thanks again to you all. Now only time will tell if I made the right choice.