A split loan is a home loan that divides your borrowing between variable and fixed interest rates. This means that part of your loan follows a variable rate that can fluctuate with the market, while the other part is locked in at a fixed rate for a set period, typically between one and five years. You can choose how to split your loan, with common splits being 50/50, 60/40, or 70/30, depending on your circumstances and preferences.
With a split loan, you’ll effectively have two loans to manage, which can mean slightly more complexity in your loan structure. The fixed portion will have the same limitations as a standard fixed rate loan, such as restrictions on extra repayments and potential break fees if you refinance early. However, for many borrowers seeking a balanced approach between security and flexibility, a split loan offers the ideal solution.
Our brokers can help you determine the right split based on your financial goals, risk tolerance, and future plans.
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