Is a split home loan right for you?

Maude Krajcik asked a question: Is a split home loan right for you?
Asked By: Maude Krajcik
Date created: Tue, Feb 23, 2021 10:29 AM

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Top best answers to the question «Is a split home loan right for you»

Depending on interest rates and your financial circumstances, a split loan may help you pay off your mortgage faster compared to a fully fixed or fully variable home loan. For instance, with a split loan, you can make extra repayments on your variable portion without penalty from your lender.

FAQ

Those who are looking for an answer to the question «Is a split home loan right for you?» often ask the following questions:

✔️ Can you split a home loan?

A split mortgage is a loan feature that enables you to split your home loan into multiple accounts that attract different interest rates. You can allocate as much as you want to each account as long as it is allowed by your lender.

Question from categories: loan repayment mortgage broker loan calculator

✔️ Should i split my home loan?

In a rising property market, a split mortgage can be a safe bet. You can save hundreds off your mortgage repayments when interest rates are low and partially shelter yourself when rates get hiked. However, there are some drawbacks with split home loans that you should carefully consider.

Question from categories: mortgage payments loan calculator mortgage broker

✔️ What is a split home loan?

Split home loan explained

A split home loan is when you divide your loan into multiple parts - meaning you could nominate a portion of the loan to have a fixed interest rate and the remainder could have a variable interest rate.

Question from categories: variable rate loan loan repayment loan calculator mortgage broker

9 other answers

A split home loan might suit you if you want the best of both worlds (i.e. variable and fixed rates). See how these loan types stack up by using our handy comparison service. In minutes, you can compare variable and fixed loans from some of Australia’s major lenders.

If you're conflicted about the type of home loan to select, it could be worth giving some thought towards the possibility of a split home loan package. Sometimes all you need is a little variety. There are a number of home loan options available, which can be matched and paired with your needs in order to help you achieve the best possible mortgage situation.

A split loan allows borrowers to take out a portion of their loan with a fixed rate, while the rest remains set with a variable rate, and all under one home loan product. These are great for people who want to spread their interest rate risk, especially in the event of an escalating cash rate and rising rates for credit products.

You’d like to split your $500,000 home loan, and after considering the types of home loans available and how they may match your needs, you decide on a 60:40 split. Your home loan would then be divided into two loans - a fixed

Split the difference Another option might be a part fixed, part variable loan structure to leverage the advantages of each. In splitting, the percentage allocated to a variable interest rate should be based on what you’d comfortably be able to afford should interest rates rise. Secondly, consider your plans for the next three to five years.

Split rate loans. Splitting your loan into both a fixed rate and a variable rate means you cover yourself on both options. You have the flexibility and advantage of interest rate movement with a variable loan for part of your mortgage, combined with the security of locking in an interest rate and knowing how much you have to repay with the ...

A home loan split means dividing portions of your loan principal (the money you have borrowed) into different home loan accounts with different interest rate types. You could split your loan 50/50 between a fixed rate and a variable rate, or you could split it 80/20 and so on. Some lenders allow you to split multiple times.

A split loan allows you to take advantage of the benefits of both types of loans – you have the certainty of a fixed rate on part of your loan as well as the flexibility to make extra repayments on the variable rate part of your loan. Understanding principal and interest vs. interest only

How to split your loan To see if your home loan is eligible for a split, you can use our switching matrix. If you think splitting your home loan might work for you, our home lending experts can help you work out what’s right for you.

Your Answer

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What does split loan mean?

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Split home loan explained

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