Refinance a Split Loan? Your Path to Savings (2026)

Refinancing a split loan can be a daunting task. If you're a homeowner juggling the complexities of a split loan, you may feel stuck trying to balance the benefits of fixed and variable rates while seeking better financial terms. You're not alone in this challenge. Many Australians find themselves in a similar predicament, eager to explore refinancing options but unsure where to start. Let's delve into the intricacies of split loan refinancing, empowering you with the knowledge and tools to make informed decisions.

Understanding Split Loans

A split loan is a mortgage option that allows you to divide your loan into two or more parts, often combining a fixed interest rate portion with a variable rate portion. This structure provides the stability of fixed repayments while also offering the flexibility to take advantage of potential interest rate drops. As of 2026, split loans constitute a significant portion of Australian mortgages, reflecting homeowners' desire to hedge against market volatility.

This dual approach can be beneficial, but it also means that when interest rates change, you could be paying more than necessary on one part of your loan. Understanding how each portion of your split loan operates is crucial when considering refinancing.

Key Information on Refinancing Split Loans

When contemplating refinancing a split loan, it's essential to consider current interest rates, your financial objectives, and the potential costs involved. The Australian market in 2026 presents a varied landscape with interest rates ranging between 6.49% and 12%, depending on the lender and your credit profile.

Here are some key elements to consider:

Refinancing might involve switching both portions of the loan to a new lender or renegotiating terms with your current lender. Eligibility criteria often include a stable income, a good credit score, and sufficient equity in your property.

Steps to Refinance a Split Loan

Refinancing a split loan requires careful planning and execution. Follow these steps to ensure a smooth transition:

1. Review Your Current Loan: Understand the terms of both the fixed and variable portions, including interest rates, fees, and break costs for exiting a fixed-rate agreement.
2. Set Clear Objectives: Determine what you aim to achieve through refinancing. Are you looking for lower monthly repayments, a reduced interest rate, or more flexible loan features?
3. Compare Lenders: Use Esteb and Co's access to 83+ lenders to explore a wide range of options. Consider interest rates, fees, and any special offers.
4. Calculate Costs: Factor in exit fees, application fees for the new loan, and any potential break costs. Ensure the savings from a lower rate outweigh these expenses.
5. Submit Your Application: Once you've chosen a lender, gather required documents such as proof of income, credit history, and property valuation. Submit your application for approval.
6. Finalise the Loan: Upon approval, work with your new lender to finalise the loan. They'll handle the transition from your old loan, ensuring a seamless changeover.

Expert Tips and Considerations

Refinancing a split loan can be complex, but these expert tips can help you navigate the process:

• Monitor Market Trends: Keep an eye on interest rate trends. Timing your refinance to when rates are low can maximise your savings.
• Evaluate Loan Features: Beyond interest rates, consider features such as offset accounts, redraw facilities, and repayment flexibility.
• Consult a Mortgage Broker: Engaging with a knowledgeable broker, like those at Esteb and Co, can provide valuable insights and access to exclusive deals.
• Consider Long-term Goals: Align your refinancing decision with your long-term financial goals, such as paying off your mortgage faster or investing in additional properties.
• Understand Break Costs: Exiting a fixed-rate loan early can incur significant break costs. Ensure you understand these and how they impact your savings.

Frequently Asked Questions

1. Can I refinance just one part of my split loan?
Yes, it's possible to refinance only the variable or fixed portion of your split loan. However, this may depend on the terms set by your current lender.

2. Are there fees for refinancing a split loan?
Refinancing typically involves exit fees, break costs for fixed-rate loans, and application fees for the new loan. It's crucial to calculate these costs to ensure refinancing is financially beneficial.

3. How do I know if refinancing is right for me?
Consider your financial goals, current interest rates, and the terms of your existing loan. Consulting with a mortgage broker can provide personalised advice tailored to your situation.

4. What documents are required to refinance?
You'll generally need to provide proof of income, credit history, property valuation, and details of your current loan.

5. How long does the refinancing process take?
Refinancing can take anywhere from a few weeks to a month, depending on the complexity of your situation and the responsiveness of your lender.

6. Can I add extra features during refinancing?
Yes, refinancing is an opportunity to add features like offset accounts or redraw facilities that your current loan might lack.

7. How can Esteb and Co help with my refinancing?
With access to over 83 lenders, Esteb and Co can provide a wide range of options and expert guidance, helping you find the most suitable refinancing solution for your needs.