Interest rate advice please

Cell

Hello

We have quite a lot of debt which is manageable and always paid back on time. However in the current climate it's unlikely to make us an attractive proposition for a new lender.

I have been approached by my current provider with the following options:

Not sure of the arrangement fees but for now I'm putting that to one side.

Currently on 4% variable.

2 year fixed at 3.59%
5 year fixed at 4.99%

2 year tracker at base rate plus 2.59% (ie 3.09% currently).

I'm looking for some sort of security, naturally, but don't want to tie myself up if things don't go as planned (ie recovery leading to interest rate rises)

My judgement is that base rate won't go up for months, possibly until 2012, and won't go above 2% for two years. To benefit from the 5 year rate I'm paying a 1% premium for at least a year I reckon and probably longer. Will base rates go above 1.5% for long enough to make it worthwhile?

I'd appreciate anyone's views, input or experiences. I promise I won't quote you in a court of law if it all goes wrong .

I suppose this is something that many of us are faced with, and none of us have a crystal ball!

Thanks :-)

Thrugelmir

Personally I would use the opportunity to pay the minimum on the mortgage. Using any free cash cash to pay down the most expensive debt first.

Is your mortgage a repayment one?

Cell

Currently half repayment half interest only.