Combination Loan
When comparing home loans you can be bombarded with choice and narrowing those choices down to choose just one type of home loan can seem like a daunting task. Therefore, why not avoid that difficult decision all together and choose both a fixed and a variable home loan?
Westpac offers a combination loan which allows you to split your mortgage between the flexibility and freedom of a variable interest rate and all the features which come with that, and the reliability and security of a fixed interest rate which in turn means fixed repayments. A Westpac combination loan also includes:
- Split to your proportions. You can choose to what ratio you want to split your Westpac combination loan. You could choose to split 50-50 between a fixed and variable interest rate or you could choose a 60-40 split or an 80-20 depending on your needs, how you want to use the loan and where you think rates are headed.
- Protection from rising interest rates. The fixed portion of your combination loan will also have fixed repayments so even if rates rise, you can be guaranteed that a portion of your home loan will stay standing still for you.
- Variable loan features. The variable portion of your loan gives you access to a range of features, depending on the variable loan you have chosen to split. For example you can enjoy features such as additional repayments, or redraw facilities to access those payments at a later date.
How to Choose Your Variable Loan to Combine
You have a wide range of choices when it comes to variable Westpac home loans to combine with a fixed rate term. For example, you could choose to combine a Westpac Equity Access Loan where the line of credit portion of your combination loan will give you even greater flexibility. Features of the Westpac Equity Access Loan include:
- A low variable interest rate. Currently 7.24% interest.
- An interest rate discount. You can add a Westpac home loan package to your combination Equity Access Loan to receive a discount of up to 0.7% for the life of the loan, keeping the variable portion of your loan several steps ahead of the Reserve Bank of Australia too.
- A line of credit loan. The Equity Access Loan is a revolving line of credit loan which means you can maintain your credit limit for as long as you need access to the additional funds, which remain approved, above your original loan amount.
- Make additional repayments. You can make additional repayments to your line of credit loan at any time without fee penalties. You can also tailor the repayment size and frequency to suit your cash flow needs.
- Low doc loan. If you are self employed, a contract worker or a new Australian for example, you can apply for the Westpac Equity Access Loan with a low doc application, and self certify your income.
- Put your equity to use. The line of credit for the Equity Access Loan is approved up to a portion of the amount of equity you have available in your home. you can then draw down on your line of credit to renovate your existing home, or purchase another investment property for example.
- Pay interest on only what you have used. While you may have $100,000 approved on your line of credit loan, if you have only drawn down $40,000 to date, you only pay interest on that amount.
Who is Suited to a Combination Loan?
A combination loan can make your home loan easier to use and more affordable if you make the right choices on the loans you are combining and choose the right split ratio. You should also make sure you are suited to a combination loan, and can benefit if:
- You are a first home buyer. If you are choosing your first home loan the choice can be even more daunting and with less experience in choosing and using a home loan. Therefore, being able to mix and match features and interest rates from several different loan types you can familiarise yourself with the types of mortgages, and this can help you decide whether you want to renew your split or fixed rate term, or stay with a fully variable loan. Fixed interest rates also means fixed repayments and this stability over a portion of your loan can help you as you start to budget as mortgage holders.
- You are unsure about rates. Fixing your home loan interest rate is not ideal when rates have already started to rise but fixing just a portion of your repayments in a combination loan can help cushion some of the blow if you are worried about your repayments blowing out your budget.
- You want to manage your loan and have some reliability. A fully fixed loan is often a set and forget product because you are not able to access many loan features. However, if you want to be able to manage your loan and plan to pay it off sooner, you can do so with a combination loan to the variable portion of the account, while still enjoying the reliability of a fixed interest rate portion.
How to Apply for a Westpac Combination Loan
If you are interested in a Westpac combination loan and would like more information or advice, Westpac allows you to complete an online enquiry form, and they will contact you at a time which suits you. Whether you are a first home buyer, moving home, refinancing or investing, start a split loan comparison now to help you with your decision today.
Related posts:
- IMB Discount Split Home Loan
- NAB Home Equity Line of Credit
- ANZ Three Year Fixed Rate Home Loan
- Home Loan Features
- eChoice Split Rate Home Loans
- Commonwealth Bank Interest In Advance Fixed Rate Investment Home Loan
- ANZ Five Year Fixed Loan
- Mortgage House Loans
- AMP Bank Fixed Rate Loan
- Westpac Fixed Rate Investment Property Loan
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