Split mortgage?

Discussion in 'Loans & Mortgage Brokers' started by Roo, 18th May, 2020.

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  1. Roo

    Roo Member

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    Opinions on a split loan? I thought my loan was going to be standard variable but just saw the paperwork and it's split (half variable and half fixed). Not sure why it's been structured this way.
     
  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Perhaps a good q for your credit advisor

    Like Buying a Toyota, you think u need a Tarago, but end up with a Camry, but you really need a Landcruiser.

    ta

    rolf
     
  3. Jess Peletier

    Jess Peletier Mortgages, Finance & Property Strategy Aust Wide Business Member

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    Who did the loan for you? Best ask that person what's going on. It's very weird to be given a fixed loan if you didn't specifically ask for it and/or sign off on it!
     
  4. Roo

    Roo Member

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    Yep I'm just reading it for the first time now. Not sure I understand the analogy. Is it comparable to a very ordinary deal?
     
  5. Property Twins

    Property Twins Mortgage Brokers & Buyers Agents Business Member

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    Did you ask for fixed and variable portions? What was on the draft application?
     
  6. Roo

    Roo Member

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    Nope draft was all variable
     
  7. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    Banks don't just split loans - it must have been applied for that way. Did you use a broker or go direct?
     
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  8. Lindsay_W

    Lindsay_W Well-Known Member

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    Likely no one can answer this apart from the person who set up your loan... so why haven't you asked them?
     
  9. Roo

    Roo Member

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    If you had read the post, mate- you might have realised the only question I asked was about opinions on split loans. I wasn't asking anyone to pull their tarot cards out. Jesus.
     
  10. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    my thoughts - if you don't know why it is split is to stop until you find out.
     
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  11. Lindsay_W

    Lindsay_W Well-Known Member

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    Haha I'll put my tarot cards away then, but my question still stands...
    Split loans are good for some and not for others, the question is does it suit your needs?
     
    Last edited: 18th May, 2020
  12. ozwanderlust

    ozwanderlust Well-Known Member

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    Do you have an offset account? The reason we have had a split loan because we also have an offset account. If we stay with all standard variable the current rates will be higher than some fixed rates. If we split the loan we can have the benefit of the lower fixed rates and the full offset for the standard variable rates.
     
  13. Roo

    Roo Member

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    Honestly, I don't anything about split loans. Wasn't even aware it was an option. I just wanted to know the advantages/disadvantages and what type of borrower would usually go for that type of loan structure.
     
  14. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    They would generally split if
    a) wanted some variable some fixed, or
    b) some IO or some PI
    c) of a combo of the above or
    d) if the uses of the loans were differnent or
    e) if the securities were different, or
    f) if there are 2 borrowers who want one loan each

    etc
     
  15. Lindsay_W

    Lindsay_W Well-Known Member

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    Generally someone who has some cash to park in an offset against the variable split but also wants to take advantage of lower interest rate offered on fixed rates, some view it as the best of both worlds.
     
  16. Peter_Tersteeg

    Peter_Tersteeg Well-Known Member Business Member

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    When people have a loan that is 50% variable, 50% fixed, this really sounds like there really isn't much thought behind the reasons for the split loan. The structure it too generic.

    There's lots of ways in which a split structure can be very useful, but there should be some solid reasoning behind it (I can say that about almost everything). If it's well thought out, people would likely understand the recommendation and wouldn't even need to ask the question here.
     
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  17. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    good combo............

    Im a christian and not offended, coz I learnt a long time ago to listen for understanding - not offence

    ta
    rolf
     
  18. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Usually

    The Gambler

    the 50/50 is an each way bet :)

    ta
    rolf