What is a split loan?
At ubank, you can split your home loan if you are on a Flex home loan, but we don’t offer split loans if you’re on a Neat variable home loan. A split loan is when you split your home loan into two or more loan accounts. You can either split your existing loan balance or increase your loan balance with a split loan (increasing funds or requesting interest only repayments is subject to credit assessment and ubank’s approval).
Here’s an example of a split loan. Let’s say you have a $500K Flex variable home loan. You can choose to fix your interest rate on $100K of your loan and leave the remaining $400K on a variable loan. This would count as a new split loan because we’ve created a new loan account for the fixed part of your loan.
Here’s an example of a split loan when you increase your loan amount. Let’s say you have a $500K Flex variable loan. You want to borrow another $100K and fix the interest rate on it. This also counts as a new split loan because we’d need to create a new loan account for the fixed part of your loan.
When you split your loan, the balance of each new split loan must be at least $20K. That means that if you had a current loan balance of $40K, you must split your loan into two split loans of $20K. You can’t split your loan into one $30K split loan and one $10K split loan, because a $10K split loan would not meet our minimum loan balance.
You can split your loan between fixed and variable rates, or you can also split your loan between principal & interest (P&I) and interest only (IO) repayments. We don’t have a limit on how many split loans you can create, however we do charge an additional $250 annual fee for every 5 split loans you hold. If you have more than 5 split loans, we’ll charge another $250 for the 6th split and if more than 10 splits, an additional $250 for the 11th split.
If you’d like to split your loan, give us a call on 13 30 80 and we’ll help you out.