The best ISAs and the best loans for property investment: Opposite ends of the spectrum

Property investors and savers have got it tough. Whereas we all want the best ISAs on the market to get those high interest rates, and maximise tax-free earnings on the money in the bank (unless you have some types of stocks and shares ISAs); the same person may wish for a rock-bottom interest rate on the mortgages of their property portfolio, reducing the cost of borrowing to boost margins. So, how on earth do you strike a happy balance between the two?

Savings aren't the hot commodity at the moment, but it's a generally-accepted view that if the base rate is going to experience any activity, it'll go up instead of down. When this event will occur is an entirely different matter - both the UK and US seem determined that their interest rates will remain as they are until May 2012 so as not to inhibit growth. To make the most of any potential increases in interest that could occur in the coming years, then, you should try to invest in savings bonds with a variable APR.

Irrespective of whether the interest in your savings account is paid every month or year, you will be able to keep an eye on the annual percentage rate that your bank offers. In some cases, it may dip below the rate that was advertised when you first became a customer. It's recommended you keep an eye on this; switching and getting another deal from a price comparison site can be important to ensure that your money keeps its value in real terms.

However, there may be some circumstances where you should hold on to the account you've got, even if the variable rate isn't living up to your expectations. For example, if you are still in a two-year bonus timeframe with an extra two per cent interest, you're still receiving a higher-than-average return on your savings thanks to your account's honeymoon period. Banks often do this to impress customers, mainly in the hope that they will proceed to use other services such as current accounts and loans.

Also, if you like easy access to your money, don't go for a fixed-term ISA with a 0.3 per cent increase in the variable rate when compared with your existing savings account, especially if you can make withdrawals without penalties and unlimited deposits. Sometimes, a few extra pounds and pennies can be outweighed with really impractical terms and conditions on what you can do with your money over the term.

Indeed, for now, you might find that opting for a three-year term on your ISA isn't in your best interests. By opting for a one-year or two-year account instead, you can then re-enter the market upon account maturity and embark on a deal with better interest.

Any bad news on interest rates for savers is great news for mortgage customers, especially investors with multiple properties. Now is the time to pay off as much of your secured loan as possible; if your savings aren't earning too much, plough this capital into paying off your property.

In the current climate, you need a fixed-rate mortgage and not a deal that tracks the base rate of the Bank of England. Tracker mortgages are only beneficial when the cost of borrowing is likely to go down, but as interest is already at a 400-year-low, prospects of a further slash to 0.25 per cent are improbable.

Fixed-rate mortgages afford you the chance to freeze interest rates at the current level over the next five years - even if prospects start to get better for savers and the economy gets back on its feet.

Remember: the only way that you can benefit from a low interest rate for the foreseeable future is if you can make a significant deposit. Indeed, some lenders now demand that you pay 40 per cent of your property's value upfront as a deposit before you can borrow. It's understood that this won't always be practical, so 20 per cent and 15 per cent mortgages are available. However, do be warned that your interest rates will climb if you deposit less, and even the slightest rises on the principal can leave you out of pocket because of accruing interest.