Split home loans, part fixed and part variable

How a split works

Moneysmart describes a split loan as one where you and the lender allocate how much of the loan goes to each part. You might choose any ratio the lender allows. Each part has its own rate, and its own fixed expiry date for the fixed part. When the fixed part ends, it usually reverts to a variable rate unless you choose a new fixed term. See what happens when your fixed rate expires.

A worked example

This uses RateSonar's own arithmetic with the rates held constant. It is not an offer and is not what a lender will charge you.

• Loan: $300,000 over 30 years, so the total is easy to follow.
• Variable part: the middle advertised standard variable rate, 6.74% as at 2 Nov 2026. A full $300,000 at this rate would be $1,944 a month in principal and interest.
• Fixed part: the lowest advertised 2-year fixed rate in RateSonar's data, 6.19%, which is 0.50 percentage points above the lowest advertised variable rate.

The point of the example is the shape of it. A 50/50 split would put $150,000 at each rate, so about half the loan follows the lender's variable rate and half does not. If variable rates rise, only the variable half is exposed. If they fall, only the variable half benefits. The fixed part is the same for the fixed term. Since the figures above are advertised rates for different lenders, a real split uses one lender's own two rates, so ask that lender for both.

See the current advertised rates on fixed home loan rates and variable home loan rates, and all products on the home loan rate board.

What the two parts can and cannot do

Moneysmart says fixed loans may limit extra repayments and some have fewer features such as offset accounts, and that a break fee may apply if you switch home loans, sell or pay off the loan early. It gives no dollar caps, so the cap and the fee are questions for your lender. Moneysmart also suggests asking which part of a split loan can be linked to an offset account. See how offset accounts work and extra repayments vs an offset account.

Questions for choosing a ratio

These are questions, not advice. The right answer depends on your budget and risk.

• How much of a repayment rise could I absorb? That amount of loan may be one you want protected.
• Do I want to make extra repayments or hold savings in an offset? If so, how much variable balance do I need for that to matter?
• What is the extra repayment cap on the fixed part, and what happens if I sell or refinance in the fixed term?
• How soon might my plans change, for example a sale, a baby or an income change?
• Does the lender let me change the split later, and what does that cost?
• What is the combined rate cost? Compare the blended outcome, not each part alone. See comparison rates.

Mistakes to watch for

• Pick the offset-linked part wrongly. Confirm in writing which part links to the offset.
• Ignoring the fixed expiry. Put the date in your calendar.
• Forgetting two sets of fees and rates. Moneysmart warns different rates, fees, features and conditions may apply to each part.
• Treating a split as a way to time the market. Nobody knows where rates will go. For the factors, see why home loan rates move.