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August Rate Review

There was little surprise when the Reserve Bank left the cash rate unchanged at its August meeting, however the property waters may be changing tide as we speak.

With an interest rate move on the cards in the coming months (albeit mixed reviews on its direction), the upcoming mortgage season could be a turbulent one.

Luckily, flexible home loans with split facilities give you a little bit of room to move – part of your loan can be braced for a rise, and part can be open to a discount should the cash rate drop.

Top 3 variable loans with split options: Dream Essentials Home Loan

Interest rate: 4.02% p.a.

This is the lowest variable rate on with split options, and it’s also open to extra repayments and redraws and also allows for up to five free splits. Keep in mind you will have to pay a $220 valuation fee and a $300 settlement fee, which could leave an initial sting in your pocket.

IMB Essentials Home Loan

Interest rate: 4.17% p.a.

With minimal startup fees and an unlimited number of split options, this loan could make for an easy slide into the property market as it begins to heat up in the weeks leading up to mortgage season. It also allows a 100 percent offset account and no application or processing fees. The minimum loan amount is $75,000, so it may not suit some looking to refinance at the tail end of their mortgage. Also, each split will set you back $100 and you’ll be expected to pay a $50 closure fee once you’ve paid off the loan.

CUA Fresh Start Variable Home Loan

Interest rate: 4.18% p.a.

This loan is exclusively available for new borrowers that have saved at least 30 percent of the loan amount, two precursors which may cancel it out of your options. If you do meet this criteria, you have access to a low rate, a 100 percent offset account and no establishment or monthly fees – a nice reward for your savings efforts. You can split up to four times, and each one will set you back $95.

Top 3 fixed 3-year loans with split options:

Newcastle Permanent

Interest rate: 4.09% p.a.

If you enter the mortgage game with this home loan, you’ll need to make precise repayment calculations as this product has no room for redraw (or 100 percent offset for that matter). What it does provide is up to 95 percent LVR, no ongoing fees, an unlimited number of times you can split the loan and the ability to make extra repayments to minimise principal and interest owing.

Ubank Uhomeloan

Interest rate: 4.18% p.a.

If you’ve saved 20% of the property value, you’ve got access to this product and features such as no annual service fee and extra repayment options. Just be aware that the initial application fee with this loan is a considerable $395, which could bruise your pockets if not factored into your budget. The good news is you can split up to four times, which could be a key tactic to managing repayments.

The Greater Great Rate

Interest rate: 4.39% p.a.

This loan comes with no annual or application fees, and it includes extra repayment and redraw facilities, which could be key features when considering your personal budget. While you will be allowed to split your loan an unlimited number of times, keep in mind that no 100 percent offset account means you’ll be expected to manage your money quite attentively in order to use this product to its full effect.

Story by Michelle Hutchison

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