Split Home Loans

Split Home Loans

This type of loan setup is a way of hedging your bets. If you are unsure as to whether interest rates are going up or down, you can choose a Split Rate Loan.

With this type of loan, you nominate how much of your home loan you would like to be secured with a fixed mortgage interest rate and how much of your home loan (the remaining amount) you would like to put on a variable rate.

A Split Home Loan is a cautious way of borrowing.

Advantages

  • Having part of your loan at a fixed interest rate protects you against interest rate rises.
  • Leaving part of your loan on variable interest rate leaves you less vulnerable if rates reduce.
  • Additional payments are allowed on the variable portion of the loan.

Disadvantages

  • You may not benefit greatly from any interest rate fluctuations.
  • You may be charged set-up fees, account fees and discharge fees on both the fixed portion and the variable portion.
  • You may be penalised for making higher repayments on the fixed portion.
  • You may be penalised if you pay off your loan before the due date on the fixed portion

Contact your local Origin Finance Consultant

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