What is a split loan option?
A split loan option permits our customers to split a farm loan into two or three parts. The split loan option allows customers a combination of lower interest expense, like shorter term rates provide, yet security of long term rates. For example, a customer might elect to place half of their farm mortgage on a variable rate loan product and the other half on a longer-term fixed rate option. Using this approach a customer benefits from a lower weighted average interest rate on the total mortgage, but also provides security against rising rates, which creates an interest rate hedge.
Our farm loan options are designed to provide flexibility to our customers by offering loan options including: