What Is a Split Loan?
Homebuyers can still obtain a conventional mortgage that provides a 1-5 year term and fixed rate. Other individuals must obtain an interest-only, low doc, or construction loan to finance their property and financial goals.
Among the other mortgage products that are attractive to some homebuyers is the split loan.
Home loan interest rates fluctuate. Homeowners who opt for a home loan with variable interest rates often save more than with the fixed-rate option. However, variable rates carry more risk. The Reserve Bank of Australia attempts to keep the economy, cash rate, and interest rates at balanced levels. But the economy has a mind of its own too.
If variable rates suddenly increase at a significant rate, it causes disarray for homeowners. The split loan offers the best of both worlds.
The fixed-rate portion offers stability. The variable rates provide an opportunity to capture rates when they drop. During the loan, homeowners can make adjustments to the percentages they start within the beginning. If interest rates fall in the homeowner’s favor, they can capitalize on them.
Keep in mind that this option requires a high comfort level with interest rates and mortgage jargon. Mortgage House loan specialists have access to tools and knowledge that benefit our customers. If you want to try this loan product, our team can walk you through the details.
Understanding the Split Loan Conclusion
As a non-bank lender, Mortgage House helps open the door to homeownership to more individuals. The split loan is among the innovative products we offer. Contact our loan specialists to discuss it in more detail.