Split Rate

Your loan amount is split, so one part is variable, and the other is fixed. You decide on the proportion of variable and fixed. You enjoy some of the flexibility of a variable loan along with the certainty of a fixed rate loan.

PROS

Your regular repayments will vary less when interest rates change, making it easier to budget.

If interest rates fall, your regular repayments on the variable portion will too.

You can repay the variable part of the loan quicker if you wish.

CONS

If interest rates rise, your regular repayments on the variable portion will too.

Only limited additional repayments of the fixed rate portion are allowed.

You will be penalised financially if you exit the fixed portion of the loan early.