Split home loans

Split Home Loans

A split home loan divides your loan into two or more parts, usually one fixed and one variable. The fixed part gives you certainty on repayments while the variable part keeps flexibility for extra repayments and an offset account.

You choose the proportions, such as 60% fixed and 40% variable.

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How a split loan works

Say you borrow $500,000 and choose a 60:40 split. A fixed rate is charged on $300,000 and a variable rate on the remaining $200,000. You always know the repayments on the fixed part, while the variable part lets you make extra repayments and may come with redraw or an offset account.

Pros of splitting

Some certainty if rates rise
Flexibility to make extra repayments on the variable part
Access to an offset account on the variable part

Cons of splitting

If rates fall, you only benefit on the variable part
Break costs can apply to the fixed part
Two loan accounts to manage

Try the split loan calculator, or compare fixed rate and variable home loans.

Frequently asked questions

Can I have an offset account on a split loan?

Usually the offset is linked to the variable part. Some lenders offer partial offset on fixed loans, but most don't.

What split should I choose?

Think about how much certainty you need on repayments and how much you want to pay off early. Many people fix the portion they won't pay down and keep the rest variable.

Do break costs apply to the whole loan?

No. Break costs only apply to the fixed part if you repay it early, refinance or sell during the fixed term.

Not sure how to split your loan?

We'll model a few options so you can see the repayments on each part.

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