What is a Split Mortgage?
What is a Split Loan or Mortgage?
A split loan is a complex structured mortgage that folds in the features of multiple types of loan products, eg, fixed interest rate and variable interest rate. The primary reason this is considered is to incorporate the security of a fixed rate and the benefits of a variable rate loan.
Fixed + variable is not the only type of split loan. Another common example of a split loan is in combining a standard term loan and a line of credit.
Many mortgage loans can be split into as many products as you want to reflect your personal circumstances. There is opportunity and the potential for benefits of the various options.
There are also downsides, especially as most mortgages are long-term commitments, and committing to a specific arrangement with a lack of understanding of what you are locking into.
We always recommend to secure independent advice from an experienced mortgage broker before you sign on to any mortgage. Consider it as a cross-check. It is also complimentary.