Split Loans

A split home loan lets you divide your mortgage into separate fixed and variable parts. This lets you combine the features and flexibility of a variable loan with the certainty of a fixed rate.

We’re reader-supported and may be paid when you visit links to partner sites. We don’t compare all products in the market, but we’re working on it!

Many lenders allow you to split your loan into multiple portions. You can lock in a low fixed rate on 40% of your loan amount, while putting 60% at a variable rate. If rates rise, you've still got 40% fixed at a lower rate. If rates fall, that variable 60% could fall too.

To understand how splitting works, start by comparing loans that have a split facility and use our split loan calculator to get a better understanding of how they work. A mortgage broker can also help you create the optimal split scenario for your needs.

Split loan comparison

$
years
Name Product Interest Rate (p.a.) Comp. Rate (p.a.) Fees Monthly Payment

Suncorp Back to Basics Home Loan P&IHome≥ 20% Deposit

Suncorp Back to Basics Home Loan
2.44%
2.45%
  • App: $0
  • Ongoing: $0 p.a.
$590
A competitive variable interest rate loan with low fees. The establishment fee is waived if you borrow $150,000 or more.

ME Flexible Home Loan Fixed with Members Package P&IHome 2Y Fixed≥ 20% Deposit

ME Flexible Home Loan Fixed with Members Package
1.89%
3.17%
  • App: $0
  • Ongoing: $395 p.a.
$548
$3,000 cashback when refinancing a loan of $250,000 or more. Other conditions apply. Lock in a competitive rate for owner occupiers for two years. Comes with a 100% offset account.

HSBC Fixed Rate Home Loan Package P&IHome 2Y Fixed≥ 20% Deposit

HSBC Fixed Rate Home Loan Package
1.88%
2.86%
  • App: $0
  • Ongoing: $390 p.a.
$547
$3,288 refinance cashback offer
Lock in a low fixed rate for 2 years and buy your home with a 20% deposit. Eligible refinancers borrowing $250,000 or more can get a $3,288 cashback. Terms and conditions apply.

Newcastle Permanent Building Society Fixed Rate Home Loan P&IHome 1Y Fixed≥ 5% Deposit

Newcastle Permanent Building Society Fixed Rate Home Loan
2.29%
4.11%
  • App: $0
  • Ongoing: $0 p.a.
$578
$2,000 refinance cashback
Competitive fixed rate for home buyers.Available with a 10% deposit.$2,000 cashback for eligible refinancers borrowing $250,000 or more.

Homestar Star Classic Owner Occupied Fixed Special P&IHome 2Y Fixed≥ 20% Deposit

Homestar Star Classic Owner Occupied Fixed Special
1.79%
2.12%
  • App: $0
  • Ongoing: $395 p.a.
$540
Fix to a low rate for two years. Ongoing fee only applies while the rate is fixed. Requires a 20% deposit.

UBank UHomeLoan Variable Rate P&IHome≥ 20% Deposit

UBank UHomeLoan Variable Rate
2.34%
2.34%
  • App: $0
  • Ongoing: $0 p.a.
$582
Enjoy flexible repayments, a redraw facility and the ability to split your loan. Plus, pay no application or ongoing fees.

Newcastle Permanent Building Society Premium Plus Package Fixed Rate P&IHome 1Y Fixed≥ 5% Deposit

Newcastle Permanent Building Society  Premium Plus Package Fixed Rate
2.19%
3.83%
  • App: $0
  • Ongoing: $395 p.a.
$570
$2,000 refinance cashback
Enjoy a competitive rate with no application fee for this package loan. $2,000 cashback for eligible refinancers borrowing $250,000 or more.

Australian Unity Health, Wealth and Happiness Package Home Loan P&IHome≥ 30% Deposit

Australian Unity Health, Wealth and Happiness Package Home Loan
2.29%
2.72%
  • App: $0
  • Ongoing: $399 p.a.
$578
A flexible, variable rate package loan with a 100% offset account. Requires a 30% deposit.

HSBC Home Value Loan P&IHome≥ 30% Deposit

HSBC Home Value Loan
2.19%
2.20%
  • App: $0
  • Ongoing: $0 p.a.
$570
$3,288 refinance cashback offer
This competitive variable rate loan is available for borrowers with 30% deposits. Eligible refinancers borrowing $250,000 or more can get a $3,288 cashback. Terms and conditions apply.

Newcastle Permanent Building Society Premium Plus Package Home Loan P&IHome≥ 20% Deposit

Newcastle Permanent Building Society Premium Plus Package Home Loan
2.69%
3.10%
  • App: $0
  • Ongoing: $395 p.a.
$609
$2,000 refinance cashback
New borrowers or refinancers can get a discounted rate with this package loan. $2,000 cashback for eligible refinancers borrowing $250,000 or more.

UBank UHomeLoan Variable Rate IOHome≥ 20% Deposit

UBank UHomeLoan Variable Rate
2.88%
2.55%
  • App: $0
  • Ongoing: $0 p.a.
$624
This is a competitive interest-only rate product that's also low in fees.

loans.com.au Green Home Loan P&IInvestment≥ 10% Deposit

loans.com.au Green Home Loan
2.34%
2.63%
  • App: $0
  • Ongoing: $0 p.a.
$582
Investors buying an energy-efficient property can get a discounted rate on this green investment loan.

Well Home Loans Balanced Variable P&IHome≥ 10% Deposit

Well Home Loans Balanced Variable
2.52%
2.55%
  • App: $250
  • Ongoing: $0 p.a.
$596
A very low variable interest rate for borrowers with a 10% deposit. Add a 100% offset account for $10 a month. Not available for construction purposes.
loading

Compare up to 4 providers

What is a split rate home loan?

A home loan split means dividing portions of your loan principal (the money you have borrowed) into different home loan accounts with different interest rate types. You could split your loan 50/50 between a fixed rate and a variable rate, or you could split it 80/20 and so on. Some lenders allow you to split multiple times.

Split rate home loans allow you to enjoy some benefits of both fixed and variable rates. If your lender cuts rates, your variable portion will drop. But if rates rise, the fixed portion of your mortgage split will still be at the lower rate (because fixed rates don't change).

Here's an example.

Catherine goes for a split loan

Split home loans case study 2 Catherine is discussing her split loan options with her lender. She needs to borrow $300,000 and wants both repayment certainty but the ability to make additional repayments and put funds into a 100% offset account.

Catherine decides to split her loan 50/50, putting $150,000 into a 3 year fixed rate account and $150,000 into a variable rate that has an offset account. She also puts $50,000 of her savings into the offset account, reducing her variable loan principal to $100,000.

Fixed versus variable rates: what's the difference?

How does a split facility work?

The process for splitting a loan is relatively simple, although you can do very complicated splits with the aid of a split calculator or a broker.

  1. Find a loan with a split facility. Not all mortgages have the option to split your loan. Check if yours does and if it doesn't, ask your lender if they can make an exception or consider refinancing to a loan that allows splits.
  2. Decide your split portions. You can split any way you like depending on how you wish to structure your loan.
  3. Make repayments. Once your loan is split you make repayments into each portion as normal. If your variable portion allows for extra repayments you could pay off extra in order to pay off your loan faster.
  4. Monitor your rates. The fixed rate portion won't change during the fixed period. But your variable portion can change at any time, so be sure to monitor the rate. If it gets too high you might want to refinance. Just keep in mind that there are breaking costs associated with ending a fixed rate, which could be costly.

Split loan calculator

You can use our split loan calculator to estimate the costs and benefits of splitting your rate. When you start using the split loan calculator, don't forget to pay extra attention to the information you're adding. Each number you enter correlates with the final outcome. So if you still don't have the exact numbers, find them out. If you can't do that, use the closest figures available.

Say you type in $260,000 paying monthly. Automatically the calculator will draw the fixed repayment, which in this case would be $1,100, the variable repayment $761, the total monthly repayment $1,861 and the total interest payable $432,750. When you're done calculating the split, you should have a good idea of how a split loan can help you.

Why should I split my rate?

  • Offers certainty and flexibility. A split rate loan can give you the certainty that a portion of your loan won't be impacted should interest rates rise, but the flexibility to benefit from any rate reductions and some of the features commonly offered on variable rate loans.
  • Repayment certainty. A fixed rate locks in a rate for an agreed period of time. During this fixed term, your rate, and therefore your repayments, won't change at all. This can give borrowers who are trying to keep to a strict budget more security, and can minimise the impact of rate increases.
  • Offset accounts and extra repayments. If the variable portion of your loan allows for extra repayments or has an offset account you can use extra cash to reduce your home loan debt faster.
  • More options. A split facility gives you more options with your mortgage, allowing you to fine tune your splits for maximum effect.

How can a broker help?

Mortgage brokers are home loan experts and they can help you design a mortgage split that works for you. This can be very helpful because calculating these splits and understanding the benefits can be confusing for the average borrower. A broker's service is usually free because they receive a commission from the lender, not the borrower.

More guides on Finder

Home Loan Offers

Important Information*

Find the right home loan now

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.

4 Responses

    Default Gravatar
    DianeSeptember 8, 2017

    Continuing, there might not be enough collateral to make up the 80% that we need to refinance as the interest loan runs out and ends in 5 months and as I said there might not enough , have you got any suggestions, we could rent the investment house as it stands empty, we just didn’t have to , I guess, Diane

      Default Gravatar
      JonathanSeptember 8, 2017

      Hello Diane,

      Thank you for providing these additional details.

      If you’re unable to come up with 80%, your nearest option is to use the equity available in your family home to borrow up to 100%. You can check about line of credit equity loans and the list of lenders available.

      Alternatively, if you’re uncomfortable with tapping your home equity, you may proceed with refinancing deals that offer low-deposit home loans. You can use the calculator located at the top of the comparison table to get an estimate of your repayments.

      Hope this helps.

      Cheers,
      Jonathan

    Default Gravatar
    DianeSeptember 8, 2017

    We have 2 houses ,one that we live in paid $ 364,000 in 2009 and the other an investment house,paid $364.000, almost 5 years ago. Also, we have interest loan only, it expires in 5 months, there has been a down turn and both house together are valued at $370,000. We have a business, Bank said they don’t chattels for loans, help.

      Default Gravatar
      JonathanSeptember 8, 2017

      Hello Diane,

      Thanks for reaching out to Finder.

      Lenders have different criteria when it comes to properties that can be accepted as security for a home loan. The general rule is the easier a property is to sell and the higher the demand for that particular type of property, the better the chances of a lender accepting it as loan security.

      You may consider getting a low doc home loan. These can be useful for business owners. Once you have selected a particular lender, you may have to directly get in touch with them to discuss the eligibility of your property as security. When you are ready, you may then click on the “Enquire now” button. If you submit your details via the form on the page, a mortgage broker will be in touch to discuss the different options available and provide you with a quote.

      Before applying, please ensure that you meet all the eligibility criteria and read through the details of the needed requirements as well as the relevant Product Disclosure Statements/Terms and Conditions when comparing your options before making a decision on whether it is right for you. You can also contact the provider if you have specific questions.

      Hope this helps.

      Cheers,
      Jonathan

Go to site