What Is a Split-Interest Rate?

A split-interest rate, also often referred to as a split home loan, is when a homeowner splits their existing home loan agreement into multiple parts, oftentimes split into two parts that have been classified as a variable-interest-rate loan and fixed-interest rate loan. Split-interest rates can allow a homeowner to save a substantial amount of funds on their mortgage repayments during low-interest periods. 

Homeowners are not limited in how they split their existing home loans. Clients who are interested in learning more about split-interest rate home loans should inquire with their existing mortgage broker and check out an online Split Loan Calculator for specialized information.

Split-interest rates come along with a wide variety of benefits that a homeowner can potentially obtain, including the following examples:

• Homeowners can make unlimited additional mortgage repayments
• Homeowners have access to competitive interest rates
• Homeowners have the potential to adjust their home loan
• Homeowners have access to flexible loan features
• Homeowners have access to security against interest rate changes
• Homeowners have potential access to mortgage offset accounts

What is a Fixed-Interest Rate?

A fixed-interest rate refers to a home loan type with an interest rate that does not change over the home loan duration. Fixed-interest rates can allow homeowners to benefit from mortgage offset accounts, make unlimited additional mortgage repayments, and redraw funds that have been used to make additional mortgage repayments to use on various expenses. 

What is a Variable-Interest Rate?

A variable interest rate refers to a home loan type with a non-fixed interest rate that changes and fluctuates throughout the duration of the home loan and allows homeowners to take advantage of low-interest rates which can result in reduced monthly mortgage repayments.