Split Home Loans
A split loan is where you divide your loan into multiple parts: one part of the loan is variable, and the other is fixed.
For example, if you were to split your $500,000 home loan, and you decide on a 60:40 split. Your home loan would then be divided into two loans – a fixed interest rate would be charged on $300,000 and the remaining $200,000 would have a variable interest rate.
While a portion of your home loan is fixed, you will always know what your repayments will be on that portion, meaning that you will benefit from rate stability for that portion of your loan.
With the variable part of your home loan, you have the flexibility to make unlimited additional repayments, which could mean paying off that portion of your home loan faster, as well as potential access to benefits such as redraw and an offset account depending on the type of variable rate home loan you choose.
It is worth noting, however, that not all lenders offer this type of loan.