Split Rate Mortgage

Your loan amount is split, so one part is variable, and the other is fixed. You decide on the proportion of variable and fixed. You enjoy some of the flexibility of a variable loan along with the certainty of a fixed rate loan.

Pros

  • Your regular repayments will vary less when interest rates change, making it easier to budget.
  • If interest rates fall, your regular repayments on the variable portion will too.
  • You can repay the variable part of the loan quicker if you wish.

Cons

  • If interest rates rise, your regular repayments on the variable portion will too.
  • Only limited additional repayments of the fixed rate portion are allowed.
  • You will be penalised financially if you exit the fixed portion of the loan early.

Why choose a Split Loan?

It gives you the best of both worlds. Recently, fixed rate loans have been priced extremely competitively and we are seeing more mortgage holders pursuing this loan product option. But when features like offset accounts and the ability to pay extra into the loan are required then a variable rate loan is the solution.

What’s more there is no set amounts each product needs to be. For instance, you can split the loan amounts right down the middle or you can opt to have either a greater fixed or greater variable – it’s your choice.

As part of the service, the Blackburne Mortgage brokers will explain how the structure works the features and benefits of each product and guide you to make the best selection based on your own financial goals and personal circumstance.

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