However, this means it's easy to become complacent about what are, after all, the lowest interest rates of all time. Here, we look at how you can take advantage now, rather than kick yourself later down the line when rates have returned to their far more typical 5.0 to 5.5%.
Move your mortgage
The most obvious place to start is with borrowing - the most significant of which is likely to be your mortgage. From May 1 some lenders, including Halifax and the Co-operative bank, hiked their standard variable rates in spite the base rate freeze. You can read more about this and other mortgage rate rises in Clare Francis' article, What's happening to mortgages?
But while some mortgage rates are on the up, there are still some highly attractive deals available. If you have 40% equity in your home for example and a good track record of repaying your debts, you may be able to qualify for HSBC's lifetime tracker priced at just 2.79% with no fee. Rates like this would have been unheard of a few years ago but, certainly for some borrowers, they are now up for the taking.
If you are a first-time buyer and are looking for security of payments, it might be a good idea to fix instead. If you can muster a 10% deposit, First Direct is charging a fixed rate of 4.19% for two years in exchange for a £999 fee. And if you can manage a 20% deposit, you can fix in even lower at 3.79% with Leeds Building Society. This deal is for five years and requires a £999 fee.
Top tip!
You will need to cough up early repayment charges to leave a fixed rate deal during the stated term, so make sure you are settled for the relative duration.
In any situation, it's worth comparing deals on a mortgage calculator to see how much you could save every month before the record low interest rates environment passes you by.
Cash in on cheap personal loans
Personal loans rates are also at an all-time low. For example, if you are looking to borrow between £7,500 and £15,000 Sainsbury's Bank has recently lowered its rates to a representative APR of 5.9%. Not only is this market leading, it marks the first time that personal loan rates have dropped below 6% since 2007. You can read more about this and other loans at this borrowing level in Melanie Wright's article, Loan rates fall to a near five-year low.
If you are looking to borrow more than this - for example, between £15,000 and £25,000 - Clydesdale Bank, alongside its sister brand the Yorkshire, has just entered the unsecured loan market with a market leading rate of 7.7% on borrowing between these thresholds.
Deals like these will require a keen credit score so check yours at MoneySupermarket's credit scoring channel. But even if your score is not likely to qualify, if you have existing loans that are charging you high rates of interest, there may still be cheaper alternatives. You can see what's available at our loans comparison channel.
Once you have found a cheaper loan, you could use that to clear your current debt and still be better off in pocket each month. Or you could choose to shorten the term of your loan - for example from five years to three - and use the amount you have saved in interest to fund the higher repayments.
Top tip!
Personal loan rates are usually fixed so the rate you see is the one you pay for the agreed term.
Banish credit card debt
If you have outstanding debt on a credit card, the interest charged has very little to do with base rate. According to the latest figures from the Bank of England, the average APR on a credit card is a whopping 17.31% which is an enormous disparity.
However, it still doesn't make sense to be paying interest on credit card debt. Instead, transfer it to a card that offers 0% interest on balance transfers. The market leading card in this arena which is available to all applicants is BarclayCard's Platinum Balance Transfer Card with Extended Balance Transfer. This offers 22 months interest free on balances transferred for a 2.9% fee. Transfers of more than £2,500 made during the month of May however, will trigger £30 cashback, bringing the equivalent fee down to 1.7%.
Fight back with your savings
When it comes to your savings pots you will need to sift out the highest rates, not the lowest - so this is where current interest rates turn swiftly from friend to foe. Limp returns on savings are compounded by the fact that, at 3.5%, the rate inflation (CPI) is much higher than the government's 2% target, eroding the nation's savings pots even further. In short, it's even more important to seek out the best home for your cash. So where do you start?
The first port of call is to take advantage of your tax-free cash ISA allowance which for the current tax year (until April 2013) sits at £5,640. All interest earned on money held in ISAs will be paid free of tax.
The highest paying easy access ISA comes courtesy of Cheshire Building Society. It offers a rate of 3.50% on a minimum investment of £1,000 - but does not accept transfers in from existing ISAs. The rate also comes with a fixed 2.50% bonus until October 2013 so you will have to move your money then to seek out the next best deal.
If you don't want to bother moving your money, choose an ISA with no bonus rate. The best in this arena is from Virgin Money and pays a 'clean rate' of 2.85% for a minimum investment of £1. This account also accept transfers in.
If you want to fix your rate, Santander is offering 3.50% for one year so long as you have a minimum of £2,500 to invest which can be from an existing ISA. But if you withdraw any money during the term, it will cost you 90 days' interest.
Longer term fixed rate ISAs will pay more - Halifax offers up to 4.50% with its five-year ISA Saver Fixed deal which requires a £500 minimum deposit - but there's plenty in between so shop around at MoneySupermarket's ISA channel.
If you have already exhausted your ISA allowance for this year, make sure the remainder of your savings are also squeezing out the best returns possible.
In terms of easy access accounts for example, the best paying is currently Coventry Building Society's Online Saver which pays 3.15% and can be opened with £1. This rate does incorporate a 1.15% bonus however which will disappear after 12 months.
If you want to fix in your savings to get a higher return, Cahoot is offering a market leading rate of 3.60%. However, the stumbling block is that you will need £25,000 to qualify.
If this is not realistic, Tesco Bank is offering 3.50% with its fixed rate bond for investments of £2,000 or more. Longer term deals are available too at MoneySupermarket's fixed rate bonds channel.
Don't delay!
It's widely expected that interest rates will stay down at their unprecedented lows for some time, but even the experts don't have a crystal ball and it can't do any harm to take action now.
Never let it be said that you didn't cash in on the lowest interest rates since Bank of England records began - as far back as 1694.
Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.
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