A combination or split home loans allows you to customize the home loan and bring together the benefits of a variable home loan and a fixed home loan into a single loan. You can also nominate how much of your home loan you would like to be secured with a fixed interest rate and the remaining amount on a variable interest rate.
Advantages of combination/split home loans:
• Borrowers have the opportunity to hedge their bets in times of rising interest rates and gives a blend of repayment flexibility and interest rate security
• Allows you to customise the home loan and combine fixed and variable into your home loan, for example, 80% variable rate with a 20% fixed rate
• A good solution if you are unsure of interest rate movements
• Additional repayments can be made on the variable portion of the split home loan
• Competitive fixed and variable interest rates
• Most split home loans have redraw available on the variable portion of the combination split home loan
Disadvantages of combination/split home loans:
• The variable portion of the home loan is still vulnerable to interest rate rises
• If interest rates rise, repayments on the variable portion also rise
• A redraw facility may not be available on the fixed portion of the combination home loan
• You may be penalised if you pay out the split home loan before the term ends on the fixed portion of the mortgage
• Borrowers may be charged setup fees, account fees and discharge fees on both the fixed and variable portion of the home loan
• You may be charged for making higher repayments on the fixed portion of the split loan
Please use the home loan calculators including the borrowing power calculator or the split loan calculator. Alternatively, speak to one of the mortgage brokers at Intellichoice on 1300 55 10 45 for more details on the various home loan products available and whether split loans are suitable for your needs and circumstances. With access to over 35 mortgage lenders and 800 home loans and mortgage loans, the mortgage brokers at Intellichoice will find a home loan to suit your needs.