With a little creativity, you can find the best possible borrowing strategy for your financial situation. One option is to have a part fixed, part variable interest loan. A split loan allows you to manage some of the risks of interest rate rises while still being able to make extra repayments.

There's generally no limit to the way you can split the loan, so you can allocate the funds 50/50 or 20/80 - the decision is up to you.

ASIC provided a case study of one couple who split their $500,000 loan into $350,000 on a fixed rate of 7 per cent and the remaining $150,000 on a variable rate of 7.4 per cent. Because interest rates kept going up, they had saved $220 per month by locking in that fixed rate for as long as they could afford.

Whatever loan you decide to take out, it needs to work for you. That means the loan should have the features, flexibility and fees that are the most appropriate for your needs.

So how will you split up the rates on your mortgage repayments? How much of a fixed rate can you swing, and how much will you let slide into variable territory? It probably depends on your financial needs. The benefit of a fixed rate is it offers certainty. If you've got to deal with big expenditures in your future, like paying tuition at a university, you might benefit from a more stable loan. On the other hand, variable rates can be more flexible. If you've got unstable sources of income and you want the freedom to make additional repayments as you see fit, you might want more of your rate to be malleable. Figuring out the details of your home loan can be complicated, which is why it's often wise to turn to the professionals. Give us a call today!