Bankrate: Low interest rates to make ’13 another good year for borrowers, lousy one for savers

Thirty-year fixed mortgage rates are expected to hover between 3.5 percent and 4 percent this year, McBride said, as the U.S. Federal Reserve expands its balance sheet by purchasing long-term debt to keep them low. “Even in the context of an improving economy, it will be tough for rates to go up very much when the Fed is expanding its balance sheet at a trillion-dollar annual pace,” he said.

Those just looking to improve their homes face an improved lending environment. With home prices stabilizing, and even starting to rebound, lenders are going to be more competitive with offers for home equity lines, McBride said.

“A lot of lenders wouldn’t touch home equity loans the past couple of years because home prices were falling,” he said. With signs of a housing rebound, “those in a second-lien collateral position are more secure, and more eager to do new home equity business without the feeling that home prices will drop.”

Consumers that spent the past few years improving their credit profiles also have an increased opportunity to find a credit card with more favorable terms. They may be able to take a 15 percent interest rate, for example, down to one in the single digits, or even take advantage of a 0 percent balance transfer offer, McBride said.

“Credit cards won’t see much change in rates during the year, but we will continue to see this big disparity between rates offered to consumers with strong credit versus those with impaired credit,” he said.

While the low-interest-rate environment represents an opportunity to spend on big-ticket items, McBride emphasized that households should still focus first on building their emergency savings. Only 1 in 4 households have an adequate savings cushion to cover expenses in case of income reduction, job loss or simply unexpected costs.

“It’s an insurance policy. Low interest rates aren’t a deterrent from the necessity of having an adequate cushion,” he said. “You need that emergency savings cushion to help you sleep better at night.”