What Are the Benefits of a Split Loan?

Split home loans allow clients to divide their mortgages into multiple loan accounts and classify the various accounts with fixed or variable interest rates. In short, a split home loan is technically a hybrid loan of fixed and variable rate home loans. 

Split Home Loan Benefits

• Competitive interest rates
• Flexible loan features
• Adjustability
• Security against interest rate changes
• Access to a mortgage offset account
• Options to make unlimited additional mortgage repayments

What is a Variable Home Loan?

A variable home loan refers to a type of home loan with a non-fixed interest rate that changes over time. Variable-rate home loans allow a homeowner to take advantage of dropping interest rates that can result in lowered monthly mortgage repayments, However, homeowners may also face increased interest rates that can result in increased monthly mortgage repayments. 

Variable interest rate home loans can also allow a homeowner to make unlimited additional mortgage repayments, redraw funds that have been used to make additional mortgage repayments, and benefit from a mortgage offset account that can result in decreased interest rates. 

What is a Fixed Home Loan?

A fixed home loan refers to a type of home loan with an interest rate that does not change over the duration of the terms of the loan. Fixed-rate home loans can allow homebuyers to easily budget their monthly expenses, save funds for other expenses, and avoid interest rate increases that can result in increased monthly mortgage repayments. 

If a homeowner is interested in learning more about splitting their home loan, they should reach out to their current mortgage broker and take a look at a Split Loan Calculator.