Homeloans pitches discounts on split loans

by Ben Abbott15 Feb 2012

Homeloans has launched a new split loan that will give its Ultra and Ultra Plus borrowers discount incentives to fix a portion of their loan.

At the highest reduction off its quoted fixed Ultra Plus rate of 6.24%, the new 'combo loan' will be available at 5.99% per annum (one, two or three-year fixed) on loans of 75% LVR or less.

The loan offers a discount of 0.15% off its rate for fixed portions up to 50% with LVRs higher than 75%.

Homeloans said while it has always offered split loans, the new product was different in offering these discounts, as well as the ability to combine them with lower LVR discounts.

Homeloans general manager Greg Mitchell said the market was ripe for split loan products.

"Homeloans’ research has shown unprecedented polarisation between those who have the intention of fixing and those who do not, suggesting that the market is genuinely ‘sitting on the fence’ about which is the right option," he said. "So the split loan has never been more relevant."

Mitchell said the concept had been tested with a selection of brokers and it had been "widely welcomed" as a proposition which is relevant in a market with multiple rate movements.

"In light of current interest rate movements with both variable and fixed rates mortgages, there have been some very competitive offerings in the market, and Homeloans continues to prove its agility in providing products which suit different needs," Mitchell told Australian Broker.

The Ultra Plus package includes an annual fee of $330, with a quoted fixed comparison rate of 6.68%.

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