Knowing which home loan will work best for you can be difficult, especially when deciding whether to go with a fixed interest rate or variable interest rate.

Depending on your circumstances, splitting your home loan can enable you to get the best of both worlds. You can split your loan at any time, from when you've just settled or throughout the life of the loan as your circumstances change.

Split home loan explained

A split home loan is when you divide your loan into multiple parts - meaning you could nominate a portion of the loan to have a fixed interest rate and the remainder could have a variable interest rate.  


You’d like to split your $500,000 home loan, and after considering the types of home loans available and how they may match your needs, you decide on a 60:40 split. Your home loan would then be divided into two loans - a fixed interest rate would be charged on $300,000 and the remaining $200,000 would have a variable interest rate.

Our split loan calculator can help you find the best combination of fixed and variable interest rates to suit your needs.

Why split?

There are advantages to both fixed and variable rate home loans. With a split loan, you can get the most out of the features and benefits that are most important to you.

While a portion of your home loan is fixed, you would be protected if interest rates rise (however, you wouldn’t benefit from a drop in interest rates), and you’d always know what your repayments will be.

With the variable part of your home loan, you’d have the flexibility to make unlimited additional repayments, which could mean paying off that portion of your home loan faster, as well as potential access to benefits such as redraw and an offset account depending on the type of variable rate home loan you choose.

You may also benefit from an interest rate drop, however that also means your repayments would increase if the interest rate goes up.

If the interest rate does drop, your repayments won’t automatically change. You can choose to lower them or keep your repayments at the same level so you repay your home loan faster.

Considering your options

How much of the loan is split between fixed and variable is entirely up to you. Before you make a decision, you may want to consider things such as:

  • Whether your main objective is certainty and reducing the impact of interest rate fluctuations, or if you’d prefer the flexibility to make additional repayments and a redraw facility or access to an Everyday Offset account.
  • If your personal and financial circumstances are likely to change in the future
  • What fixed rate timeframe you’re ready to fully commit to (from one up to five years), as there are penalties for breaking a fixed rate term.

How to apply

If you feel that splitting your home loan might work for you, you can apply at your nearest branch.

There can be drawbacks to any home loan, so it’s important you talk to a lender before making any decisions. Our lending experts can help you work out what’s right for you. You can contact us by phone on 13 2224 or by visiting a branch.

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Things you should know

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. As this information has been prepared without considering your objectives, financial situation or needs. You should, before acting on this, consider the appropriateness to your circumstances.