Splitting Your Home Loan
Splitting your home loan can give you the benefits that both fixed rate home loans and variable rate home loans can provide{sub-heading}
How a split home loan works{yellow-border}
Fixed or variable? When it comes to your home loan, it’s a big question and it can be a tough decision. The good news is that you don’t have to decide. If you like the benefits that both fixed rate loans and variable rate loans provide, you can choose to split your home loan.
Splitting your home loan means that you divide your borrowings into fixed and variate rate portions. This gives you both the certainty of a fixed rate and the flexibility of a variable rate. The great part is, you get to choose how much of your loan you allocate to each portion.
Split home loan pros and cons{yellow-border}
Split home loans appeal to borrowers who like to hedge their bets. Depending on your personal situation, splitting your borrowings into fixed and variable rate portions can give you certainty over a portion of your repayments that are fixed, while giving you the opportunity to benefit from a favourable market with the other portion of your home loan that is variable.
When it might make sense
- Certainty of the same rate for a set period
- To help with budgeting
- Concerned with changes to interest rates
- No plans to make additional repayments off your loan
- You want to pay one year interest in advance
- Make additional repayments off your loan and have immediate access to the extra funds via redraw
- You want to have an offset facility
- Less concerned with changes to interest rates
- Thinking of selling your property in the near future
A split home loan in action
What benefits can a split loan really give you? The easiest way to find out is to put some numbers to it.
As an example, suppose you have a $450,000 home loan and you split this into two separate loan accounts, one being a $250,000 variable rate split and the other being a $200,000 three year fixed rate split.
- The fixed rate split will have a rate locked in for three years with set repayments.
- The variable rate split may change.
In this scenario, almost half of your loan is fixed, meaning you know exactly how much your monthly repayments will be, for three years. This reduces the variability you need to allow for in your budget.
On the other hand, you are able to make unlimited additional repayments into the variable rate split, access these additional repayments through redraw (if you need to) and access a mortgage offset account for all of BOQ’s variable rate home loans (apart from the Economy home loan).
Our popular fixed and variable home loans
Fixed Rate Home Loan
Fix your rate for up to 5 years and relax knowing interest rate rises won’t affect you.
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For Owner Occupiers with Principal and Interest Repayments
- Enjoy great interest rates on terms from 2 to 5 years.
- Choose Principal and Interest, or Interest-Only repayments.
Clear Path Variable Home Loan
Our popular variable rate home loan is packed with smart features that give your finances room to move.
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For Owner Occupiers with Principal and Interest Repayments
- Offset your mortgage and save on interest.
- Enjoy unlimited free redraw and flexible repayments.
Split Loan Calculator
Use our split loan calculator to calculate your repayments based on fixed and variable terms.
Buying Your Next Home
Thinking of house number two? Whether you're buying an investment or a home to live in – this is your first step to knowing what you need to about buying your next house..
Need more information?{yellow-border}
We’re here to answer any questions you may have.
Chat to us
- Call us on 1300 55 72 72
- Locate your nearest branch
- Speak to your Broker about your BOQ home loan
