Split Home Loans

With a split rate loan, you get the best of both worlds. You can make part of your home loan fixed rate, and part variable rate, and you get to choose how much you want to allocate to each part.

Pros — What’s good about a split rate loan?

It’s flexible. Because part of your loan is on a variable rate, you can make extra payments and use the variable portion as a redraw facility.
You can decide the split. Most lenders, these days, allow you to choose how much of your loan will be on a variable rate, and how much on a fixed rate.
It can drop… a bit. If the Reserve Bank lowers official rates, the repayments on the variable portion of your loan will drop too. Obviously the amount you save depends on what percentage of your loan is on a variable rate.
The fixed portion doesn’t go up. You’re effectively hedging your bets. Your repayments on the fixed portion remain steady, even if official rates go up.

Cons — What’s bad about a split rate loan?

There’s still a bit of risk. Because some of your loan is on a variable rate, if the Reserve Bank puts official rates up, your repayments for that portion of the loan go up too.
Double the fees. Because you have two loans (one fixed, one variable), you may pay fees on both.

Still have questions about split home loans?

If you have any questions about split rate home loans that aren’t covered above (in fact, even if they are!), please feel free to give us a call on 1300 883 292, or enquire below, and we’ll call you.