Economic consultancies in the UK indicate that interest rates in that country could remain at their emergency level of 0.5% for up to three more years. The arrival of ultra-cheap money, regarding low interest rates, appears to be very similar currently in both the UK and the USA.

According to people living in the UK can take advantage of their tax-free ISA allowance to invest up to £5,340 before the 5th of April 2012.

Homeowners can benefit

With rates on long-term fixed-rate mortgages being at an all time low, this is the perfect time to purchase property. In this present climate of low rates, it will serve you best to opt for a 15-year, instead of a 30-year mortgage, as the money saved in interest payments will be very significant.

The benefits of owning your own home outright might also be the deciding factor between being able to retire or not.

Current homeowners can certainly consider purchasing additional real estate, as a means of earning passive income. If you have sufficient money saved to afford the down payment, this is an ideal way to make money by renting out the property, while benefiting from the current low interest and mortgage rates.

The considerable number of foreclosures means that many people will be in the market to rent and this is good news if you are in possession of additional property. You will be in a position to receive income on a monthly basis and as a landlord, will be eligible to take tax breaks in the form of mortgage interest deductions.

This is also the most opportune time to refinance your home. Switching from an adjustable-rate mortgage to a fixed-rate mortgage, will also allow you to benefit from the current low rates. An online mortgage calculator will immediately indicate the amount you will be saving.

Buy a new car or create a legacy

Although motor vehicle loans are not as low as mortgage loans, this is still a good time to trade in your old car, as many vehicle manufacturers are currently offering special financing options. Folks with good credit can use this as a force multiplier, by stretching out their money for as long a term as possible.

This is also a great time to refinance your existing vehicle loan at lower and more favorable interest rates.

Current low interest rates make it very possible and easy to be charitable and generous. A combination of poor economic conditions, low interest rates and income tax hikes, makes for the perfect opportunity to move money around, give it away or borrow it. There is really no better time to create a legacy or to be charitable.

Review your investments, lock in student loan rates and pay off your credit card. Although it is important not to lay out cash in a down economy on investments such as bonds that may not bring you worthwhile returns, this is the right time to diversify your portfolio and spread the risks.

Your financial advisor is the best person to suggest alternatives to money market funds and savings accounts. Also, make an effort to pay off your credit card as quickly as possible, as these cards always carry a high interest rate. Attempt to consolidate your student loans and to lock into a lower interest rate, if at all possible.