What is a split home loan?

Home loans come with plenty of options to help you pay it off sooner, provide flexibility or simply provide more security. Extras on home loans can include things like redraw facilities, offset accounts and split loans - all of which provide their own pros and cons.

We're here to take you through split loans and how they can help you with your home loan.

What's a split home loan?

While exploring your home loan options and extras, you’ve probably come across the term split loans.

Split loans allow you to split your home loan into two parts with one part having a fixed interest rate and the other part, a variable interest rate.

There's typically no set portion you need to choose from so you could change it to split halfway down the middle or 60:40 split for example. If you were to select 60:40, on a $500,000 loan, you could divide your home loan into two loans with a fixed interest rate on $300,000 and your remaining $200,000 on a variable interest rate. 

What are the pros and cons of a split home loan?

As with all home loan options, there are pros and cons. It really depends on your situation and what you’re looking for.

We've put together some of the pros and cons below to help you out.

Pros Cons

• Your fixed portion would be protected if interest rates rose.

• You have the flexibility to make unlimited additional payments on the variable part of your loan.

• Potential access to offset accounts or redraw on variable rate loans, depending on your bank.


• If interest rates go up, your payments on your variable portion will too.

• You'll miss out on any interest rate drops for the fixed part of your loan.

• You may encounter other extra fees charged on both sides, depending on the loan.

• You might be charged a break cost by some banks for the fixed portion if you pay it out early.


Things to consider

It’s worth sitting back and looking at what your objective is in wanting to split your home loan. Are you looking for security and certainty with payments? Do you want some flexibility?

It’s also important for you to consider if your circumstances might change in future and if it may impact your ability to meet your repayment requirements. 

How to split your loan

If you’ve decided you want to split your home loan or simply want to chat to an expert about your options, you can chat with one of our lending experts by calling us on 1300 654 822.

We're here to help

Our friendly team are here to help you through the home loan process and choose the right loan for you.

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