Aussies prefer split rate mortgages: Finder

Aussies want the best of both worlds when it comes to their home loan interest rate, according to new research by Finder.

Finder recently surveyed 1,000 Australians about how they would structure their mortgage if they were to refinance.

The data revealed that 1 in 5 (20%) would opt for a split mortgage, dividing their loan into fixed and variable portions.

Around 19% would refinance to a variable loan, while 17% would prefer to lock in their rate for a set period of time with a fixed-rate mortgage. The remaining 43% said they were unsure if they’d opt for fixed or variable.

Graham Cooke, insights manager at Finder, said that fixed-rate loans come with both risks and benefits.

“With the cash rate set to remain at 0.25% for some time, it’s unlikely the big banks will lower their standard variable mortgage rates any further for now."

“This means fixed-rate loans are back in vogue. For some homeowners, locking in their rate for a year or more may offer greater savings than a variable rate would."

“We’re currently seeing rock-bottom rates across the board with fixed rates as low as 1.95% from Easystreet, and the lowest variable rate even lower at 1.89% from Reduce Home Loans,” he said.

The research found that it’s the younger generations who place the most value on flexibility when it comes to their loan.

Over a quarter of Gen Z (27%) would split their mortgage – more so than any other generation – while Millennials are the most likely to choose a variable loan (23%).

Baby Boomers were more likely to refinance to a fixed rate (19%).

By state, Victorians (23%) are the most likely to choose a variable loan, followed by 1 in 5 NSW residents (20%).

Queenslanders are the most likely to choose either a split loan (25%) or a fixed-rate loan (21%), but the least interested in a variable one (12%).

Would you opt for a fixed rate home loan if you were buying or refinancing?