Split Loan Calculator

The Split Loan Calculator calculates the total interest amount under a variable interest rate for the full loan term compared the same loan having a fixed rate proportion (entered by user) at the start, with the fixed rate and term entered by the user. The calculation is done at the repayment frequency entered (monthly, fortnightly or weekly), in respect of the original loan parameters entered, namely amount, annual variable rate and total term in years.

Split Loan

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Note: The results from this calculator should be used as an indication only. Results do not represent either quotes or pre-qualifications for a loan. It is advised that you consult your financial adviser before taking out a loan. Calculator © InfoChoice 2009

Calculator Assumptions

Length of Month

All months are assumed to be of equal length. In reality, many loans accrue on a daily basis leading to a varying number of days' interest dependent on the number of days in the particular month.

Number of Weeks & Fortnights in a Year

One year is assumed to contain exactly 52 weeks or 26 fortnights. This implicitly assumes that a year has 364 days rather than the actual 365 or 366.

Rounding of Amount of Each Repayment

In practice, repayments are rounded to at least the nearer cent. However the calculator uses the unrounded repayment to derive the amount of interest payable at points along the graph and in total over the full term of the loan. This assumption allows for a smooth graph and equal repayment amounts.

Amount of Each Repayment after Expiry of Fixed Rate Period

The amount of the repayments at the start of the loan is determined based on the original loan term entered by the user. Similarly, the amount of the repayments to apply after the expiry of the fixed rate period is determined based on the remainder of the original loan term after deduction of the length of the fixed rate period. For example, if the entered values are original loan term 25 years and fixed rate period 3 years, then the remainder of the original loan term at the expiry of the fixed rate period is 22 years. This assumption may result in different amounts of total interest under the scenario of a combination of fixed and variable rates compared to the scenario of a variable rate only, even if the fixed rate entered is set equal to the variable rate.

Amount of Interest

The calculation of the amounts of interest under the two scenarios is rounded to the nearer dollar

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