SPLIT RATE HOME LOAN

A split rate home loan provides borrowers with the option to divide their mortgage into two portions, each with a different interest rate type: fixed and variable. This unique feature offers both flexibility and security, catering to the preferences and needs of a wide range of borrowers, including first-time homebuyers and existing homeowners looking to manage their mortgage repayments effectively.

The fixed-rate portion of a split rate loan provides certainty in monthly repayments over a set period, typically ranging from one to five years. This stability is beneficial for borrowers who prefer predictable budgeting and protection against potential interest rate increases in the market. It ensures that even if variable interest rates rise, the portion of the loan under a fixed rate remains unchanged.

Conversely, the variable-rate portion of the loan allows borrowers to take advantage of potential interest rate decreases. This flexibility means that borrowers can benefit from lower interest rates, potentially reducing overall interest costs and accelerating loan repayment. Variable-rate loans also typically offer additional features such as redraw facilities and offset accounts, enhancing the loan’s utility for borrowers seeking more financial maneuverability.

Split rate home loans are particularly attractive for borrowers who want to hedge against interest rate fluctuations while retaining some flexibility in their mortgage structure. They provide a balanced approach that combines the security of fixed rates with the opportunity to capitalize on favorable market conditions through variable rates. Borrowers can tailor their loan to suit their financial goals and preferences, making split rate home loans a versatile option in the mortgage market.

Benefits of STANDARD VARIABLE RATE HOME LOAN:

• Combines stability with flexibility by offering both fixed and variable interest rate options.
• Provides certainty in repayments with the fixed rate portion while allowing potential savings with the variable rate portion.
• Tailors to diverse financial strategies, ideal for managing market uncertainties.
• Offers access to additional features like redraw facilities and offset accounts, enhancing financial control.