To Fix or Not to Fix?

Many of the UK borrowers and savers are concerned with the question whether it is just about the right time to fix their loans and savings as banks are now offering rates on savings accounts that are 10 times the central bank’s base rate, or 5%, and as rates on mortgage loans are starting to rise significantly.
Since March 2009, interest rates on savings accounts have risen by 1.13% and by 0.31% on 5-year and 1-year accounts respectively, while mortgage interest rates are also on the rise with UK lenders increasing the rates by an average of 0.41% in this month alone.
The latest research, conducted by British mortgage brokers, reveals that borrowers, who either plan to borrow or to remortgage, should fix.
At the moment, the best tracker rate available on the market is offered by the HSBC bank at 2.74%, which is only 2.24% above the base rate. The deal compares to the deal offered by the Post Office at 4.45%: repayments on an HSBC mortgage worth £200,000 amount to £1,083, while repayments on the Post Office mortgage of the same amount constitute £1,260.
Mortgage brokers and financial organizations are making various forecasts on how much the base rate of the Bank of England will rise. For instance, Ray Boulger at Charcol expects the base rate to reach 1.5% by the end of the next year, while the Deutsche Bank says it will constitute 2%. Experts at other organizations, such as Savills and Mortgage Force, make even more dramatic forecasts by saying that the base rate will amount to 4% by the end of 2010.
Borrowers have to make their own judgements as experts opinions differ greatly. For example, the latest research of the London & County showed that the base rate will stay on hold until April 2012, and then it will rise sharply as it fell. This means, that borrowers will be better off with a tracker before April 2012. However, others believe that the base rate will start its ascent as soon as in February 2010, which suggests that a tracker will cost borrowers more than a fix.