Split Rate Home Loans, sometimes referred to as Combination Rate Home Loans or blended loans, allow borrowers to split their home loan into partly fixed and variable portions. This provides borrowers with the flexibility of a variable mortgage product and added certainty of a fixed rate loan.
Split & Combination Home Loans are a combination of up to 2 smaller, separate loan accounts together forming one home or investment loan. You can nominate a portion of your home or investment loan to be fixed and the remainder as a variable loan, just choose the proportion that works for you.
With split rate home loans & combination rate home loans, the fixed portion of your home loan is protected from increases in interest rates for the fixed period, see Fixed Rate Home Loans. You can still make additional payments and benefit from interest offset if available, on the variable portion of the loan, which may help you to pay that portion off faster.
How do Split Rate Home Loans & Combination Rate Home Loans work?
- You choose how much of the combination loan you want to split between fixed and variable
- The fixed portion gives you certainty over your repayments, protecting you from interest rate fluctuations
- The variable portion gives you access to a range of flexible features such as the ability to make extra repayments so you can pay off your home loan sooner, as well as redraw which lets you access overpaid funds to finance future goals
- Even better, add a 100% Offset Account to the variable portion
Will this cost more in fees?
Not necessarily, all the major lenders vary on the fees and charges they apply to differing loan account types, generally, split & combination home loans with a major lender will be set up as part of a lender Professional Package. However, many of the 2nd tier banks, building societies and non-bank lenders offer very competitive pricing and no ongoing fees for split & combination rate home loans, In fact we have one particular lender who offers split & combination rate mortgages, who also offers a discount to the fixed portion if it is 50% or less of the total loan amount and no account keeping fees.
Please call us now on 07 5593 1420 to talk with an Ocean Home Loans mortgage broker who can give you expert advice on split rate home loans & combination rate home loans or enquire online and we will contact you as soon as possible to discuss your options.
What else should I Consider?
The interest rate that will apply to fixed rate portion of your home loan will be the rate that applies on the day that the bank applies the changes to your existing loan or the day that the loan is advanced, if refinancing or settled if purchasing. Great news if rates go down but hardly what you were looking for if rates go up.
By paying a fixed rate lock in fee, see Fixed Rate Home Loans, you can secure the rate that applies on the day of your application. This fee ranges from $395 to $695 to 0.15% of the loan amount, by doing this you are protected from rate rises.
Rate lock is generally available for a maximum of 90 days (depending on the lender).
Ocean Home Loans mortgage brokers have access to several lenders that lock the rate in at application for free.
Apply for a Split Rate Home Loan or Combination Rate Home Loan
If you think that split rate home loans & combination rate home loans are appropriate for you then please call us now on 07 5593 1420 or enquire online and we will contact you as soon as possible to discuss your options.
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