Combination loans

Split your risk, enjoy the benefits

With a split or combination loan you’re able to divide your loan into part variable, part fixed interest rate product. There are several benefits to split loans – you combine the flexibility and side benefits of a variable rate loan with the payment predictability of a locked-in rate mortgage. Your professional ITP Home Loan advisor is the best person to help you decide whether a split home loan is right for you.

first home buyer home loan

Lender rate changes aren’t always predictable

You may have noticed that lately banks aren’t always passing on a rate cut when the RBA cuts official interest rates. However, the reverse seems never to be true – they always pass on rate increases! However, if you have a combination loan, at least you know that part of your repayments will stay the same.

Would a split loan suit you?

If you want to spread your rate risk and manage your loan more efficiently, then a split rate home loan could well be for you.

  • The fixed rate side helps you keep to your budget, with regular predictable payments
  • The variable rate side lets you be flexible with repayments, so long as you meet the minimum repayment amounts. These variations can include making extra payments, having a linked offset account or access to a redraw facility.

Combination loans are perfect for property investors. The owner-occupier loan has a fixed rate, while the investor loan is variable, to take advantage of tax deductions if interest rates rise.

home loan calculator

Designing your split home loan

You can choose how much loan money you want assigned to each of the two loan categories – it depends on how much risk you want to take on the rising and falling cash rate. Popular ratios between fixed and variable rates include 50 – 50, 60 – 40 or 70 – 30. Here’s a handy split loan calculator to help you decide.

Talk to ITP Home Loans today

Your ITP Home Loans advisor is highly qualified to advise you on your combination loan components. We will, of course, get you the most appropriate interest rates for your split loan, at no additional cost to you, and with friendly, professional service. You can email us, or make an appointment to see an advisor face to face. Alternatively, give our helpful ITP Home Loans consultants a call today on 1300 387 487.