Interest rates: The big freeze Anxious for interest rates to rise in 2013? Take a chill pill.

The low rates of the past few years — which have warmed the hearts of mortgage applicants but been cold comfort to savers — are unlikely to budge soon. For that, thank (or blame) the Federal Reserve.

To spark growth, the Fed is aiming to keep the influential rate at which banks lend one another money between 0% and 0.25%, and it expects that number to be “exceptionally low” until at least mid-2015.

“This is unprecedented,” says Baltimore financial planner Tim Maurer. “We’ve never had such low interest rates for such a long period of time.”

Here are savings and credit strategies suited to the current climate:

MORTGAGES

Freeze your rate. Buying a home? Rates are at 40-year lows, so lock yours in with a fixed-rate mortgage; interest on a 30-year fixed was 3.57% in January.

“It’s a sure thing,” says Keith Gumbinger of mortgage data provider HSH.com.

Lower your term. Refinancing? If you’re certain to move within a few years, consider an adjustable-rate mortgage; initial rates on five-year ARMs were 2.68% in January.

Otherwise, use low rates to shorten your mortgage’s term and cut interest costs. Should going from a 30-year mortgage to a 15-year be too big a payment hike, get a 20-year version. (About 15% of refinancers opt for a 20-year, says the Mortgage Bankers Association, up from 12% in 2011.)

By Zain Asher, Lauren Gensler

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