Does Splitting a Mortgage Save The Clients Money?

A split mortgage, also known as a split home loan, is a type of home loan that allows homeowners to split their existing loan into multiple parts, and classify each part as a variable or fixed interest rate. Splitting mortgages have the potential to save homeowners a substantial amount of money on mortgage repayments during low-interest periods. Generally, a homeowner is not limited in how they split their home loans and this process can be completed throughout the life of a mortgage agreement. 

Other than potentially saving homeowners money on their mortgage repayments, splitting mortgages comes along with a wide variety of potential benefits, including the following examples:

• Mortgage offset account access
• Access to competitive interest rates
• Home loan adjustability
• Access to security against interest rate changes
• Options to make unlimited additional mortgage repayments without penalties
• Access to flexible home loan features

Variable-Interest Rates

Variable-interest rates refer to a type of non-fixed interest rate that fluctuates and changes over the life of a home loan. Variable-interest rates can allow homeowners to potentially save money on their mortgage repayments during low-interest rate periods. 

Fixed-Interest Rates

Fixed-interest rates refer to a type of interest rate that does not fluctuate and change over the life of a home loan. Fixed-interest rates can allow homeowners to potentially benefit from mortgage offset accounts, make unlimited additional mortgage repayments without facing penalties, and redraw the funds used to make additional mortgage repayments to put towards a wide variety of expenses. 

If a homeowner is interested in learning more about splitting their current mortgage agreement, they should reach out to their current mortgage broker and use a free online Split Loan Calculator to gather specialized information.