Split Home Loans
Combine rate stability with repayment flexibility. Hedge interest rate risk, keep liquidity with 100% offset accounts on each split, and stay in control through changing market cycles.
What is a Split Home Loan?
A split home loan lets you divide your mortgage into separate portions—some fixed, some variable. Each portion can have its own interest rate, term, and 100% offset account. This helps you:
- Protect part of your repayments with a fixed-rate hedge during volatility.
- Retain flexibility on the variable split and benefit if rates fall.
- Optimise interest by directing funds to the most effective offset.
Learn more about fixed-rate loans and variable-rate loans, or use our Split Loan Calculator to test scenarios.
About Split Home Loans
It may seem that choosing between a fixed and variable home loan is black and white, it’s either one or the other. However, there is a third way and it allows you to combine the best features of both loan types.
A split loan allows you to have a portion of your home loan with a fixed interest rate and the remaining portion with a variable interest rate.
You have the option of selecting the percentage you would like fixed and the percentage you would like variable, as long as the minimum fixed amount is covered, as per the individual loan requirements.
Advanced Split Structures
Each split can have its own offset account, allowing you to park surplus cash where it reduces the most interest—this is practical interest rate arbitrage within your mortgage.
Many borrowers use multiple splits for precise control. Example configuration:
- Split 1: Variable (40%) with 100% offset for liquidity and extra repayments.
- Split 2: Fixed (1 year) (30%) to secure near-term repayments.
- Split 3: Fixed (3 years) (30%) to hedge medium-term rate risk.
Benefits & Considerations
Key Advantages
Hedge against rate volatility while keeping flexibility.
Use multiple offsets to target the best savings per split.
Rate arbitrage: direct funds into the lowest-rate split’s offset to reduce total interest.
Multi-split control: combine short, medium, and longer fixed terms with a variable split.
Access features like redraw and extra repayments on the variable portion.
Potential Considerations
Break costs can apply if the fixed split is repaid early or varied outside allowances.
The variable split remains exposed to rate rises.
Fees may apply if split changes exceed the permitted free adjustments.
Our Split Home Loans
Explore popular options suitable for split strategies.
Your lending expert can configure splits to your goals.
ChameleonExecutive Home Loan
Premium features designed for flexible split configurations and offset access.
ChameleonFreedom Home Loan
Balanced features and pricing suitable for mixed fixed/variable splits.
Fix & SaveFixed Terms
Short and longer fixed terms to anchor repayments within a multi-split strategy.
ChameleonSolutions Home Loan
Feature-rich option for advanced structures and multiple offset accounts.
How Does a Split Home Loan Work?
How can a split loan calculator help my decision making?
It is important when using a split loan calculator to make sure you have as much information as you can, and that the information is as accurate as possible. Calculators such as these are a great way to be able to get a full picture of how much the repayments will be, both for the variable and fixed part of your loan. As expected, they can also give you an idea of how much interest you will pay across the life of your loan. Simply put in the loan amount, when the payments will be made, how long the loan is for, and the interest rates. At Mortgage House, we have a range of calculators to help you take the steps to buying your new home, new investment property or simply to refinance your current loan. You can work out what your mortgage repayments can be, and even how much you may be able to borrow. Using the mortgages we offer, you can calculate the best rates for your split loan, and we also have a calculator that can help make decisions about switching loans easier. If you are unsure how you are going to afford a house deposit, our special budget calculator can help you get there. And we can even let you know how much stamp duty you are likely to pay on your new property.
How can I make split home loan rates work for me?
As we detailed above, you have some flexibility when it comes to a split home loan. If you want to have half your loan fixed and half your loan variable, then you can. If you want 80/20, 70/30 or even 90/10, you can. You get the picture. Speak to us about what ratio might be best for you, and what you think you can afford. But there are lots of advantages to splitting home loan rates. Obviously, having the security of a fixed rate, and the ability to pay off a variable portion is a big benefit. Most variable loans allow you to make extra payments without fees. This can save you thousands in interest over the life of your loan. And there are often more features with variable loans than there are with fixed rate loans, including lines of credit and offset account opportunities. And a lot of split mortgages allow you to change your fixed and variable ratio a number of times. This can offer you a fair bit of flexibility, and the peace of mind of knowing that if your circumstances change, you may be able to adjust your loan. However, you may have to pay additional fees.
What are the best split loan options?
As we mentioned above, split mortgages aren’t really individual loans, but are features of existing loans. As such, there is a lot to consider when finding the best option for you. There really isn’t one or two loans that stand out from the rest, as a result. So, when looking for the best option for you, make sure you take into account all the other features and fees and charges of the loan. Obviously, the interest rate is a good place to start. As is whether or not the loan has an offset option, and whether there is a minimum amount you are allowed to borrow. The next thing to consider is whether there are features such as redraw facilities, and whether you are allowed to make additional payments.
What about repayments?
The first thing to remember about repayments for split mortgages is that additional repayments for the fixed rate portion of the loan can attract fees. It can be difficult to put all the variables together when working out the repayments. Not only do you need to make sure you can afford the payments, but you need to calculate between both variable and fixed interest rates and payments. However, there are a lot of advantages to having a split loan, and we want to make it work for you.
Are there disadvantages to a split loan?
All different kinds of home loans come with their advantages and disadvantages. Whether it’s a fixed interest rate mortgage, a variable rate loan, principal and interest or interest only, construction, low documentation or even family pledge mortgages, when you apply for a home loan, your bank or lender will make you aware of all of them. When it comes to a split home loan, you may incur additional fees if you make extra repayments or pay off the fixed portion of your home loan sooner. Because some of the loan will be fixed, you won’t receive the full interest rate reductions if the variable interest rate does fall. Some split loans allow you to change the split ratios a certain amount of times. You may be charged extra fees if you change the ratio more than the allowable number of times.
Can each split have its own offset account?
Yes. Offsets can be paired per split for granular cashflow and interest management.
How often can I change the split ratio?
Most products allow a set number of free split changes per period. Additional changes may incur fees; check your product terms.
Is a split better than purely fixed or variable?
It depends on your income, risk tolerance, and goals. Splits provide balance—protection plus flexibility.
Is a split mortgage better than a fixed mortgage?
There can be advantages in choosing to split your fixed rate home loan. Firstly, a home loan with a split rate feature can allow you to access more flexibility. Variable rate loans can include extra features and extra flexibility within those fixtures. With a split loan, you can choose what percentage of your mortgage you want fixed, and what percentage you want variable. A fixed interest rate mortgage can give you the security of knowing what your repayments can be, but having a split option means you may be able to take advantage of any drop in interest rates. You may have your mortgage for 25 years or more and no one knows what your financial situation or the situation of the world’s economy will do over that time. So having access to variable rates can give you the benefit of extra flexibility. Some fixed rate mortgages can also penalise you financially for making extra repayments. If that’s the case, having a split loan can allow you to make those extra repayments without being penalised. Extra repayments means you pay less interest, which can save you thousands over the life of the loan.
Is a split mortgage better than a variable rate mortgage?
While a variable rate loan is a type of loan that can give you extra flexibility, the fact that repayments can increase or decrease, depending on a range of external and internal factors, can raise some budget concerns. If you are unsure whether or not your budget can handle too many increases in a variable rate home loan, then the security of knowing exactly what your repayments will be is attractive. A split loan can give you the option of doing that. Under the fixed rate part of a split loan, the interest rate will stay the same for the agreed period, for example 2 years. That means for up to 2 years your mortgage repayments under the fixed rate part of the loan will stay the same. So, while a variable rate home loan can give you a lot of flexibility, a split home loan can give you even more.
How can I calculate split loan repayments?
A mortgage calculator is a good way to calculate repayments for a split loan. Some banks and lenders will have split mortgage calculators online, while other versions of a regular repayments mortgage calculator can do a similar job. A split loan calculator will show you what the repayments of the fixed interest rate mortgage will be per month, as well as what the variable rate repayments will be. Generally, both the fixed and variable rate repayments will be made at the same time, at the beginning of the life of the loan. A split rate mortgage calculator will give you both a combined repayment amount for that period, and then a repayment amount once the fixed rate term is over. Alternatively, you can use a regular mortgage calculator to work out the percentage of the home loan that is fixed and the percentage that is variable, and run it through. From there, all you need to do is add the two repayments together, which will give you the figure for the fixed term period. If you are unsure how all this works, speak with our expert lending managers who can walk you through it even before you apply for a loan. Don’t forget to add stamp duty to any loan amount.
What are the fees for a split loan?
Working out what the fees for a split loan are can be difficult as you will likely be dealing with two separate loans. You can go through our split loan options below, and look at the fees and the terms and conditions, which will give you an indication of what the fees and charges can be. As mentioned above, fixed interest rate mortgages can attract higher fees, especially around additional repayments. If you are not a regular real estate buyer, it can be difficult to understand and compare all the different fees and charges. A good and quick way to compare is to look at the difference between the advertised interest rate and the comparison rate. Each bank or lender is required by law to promote comparison rates for each loan. Comparison rates are designed to indicate the real interest rate over the life of the loan. It takes into account all the fees and charges to guide you to a conclusion. Look at the comparison rates and compare them with your financial situation and property objectives when you are looking for a suitable split loan.
How does a split loan hedge risk during volatile markets?
Fixing a portion shields part of your repayments from rate hikes, while the variable portion can benefit if rates fall.
Can I have more than two splits?
Yes. Many borrowers use three or more splits, each with a dedicated 100% offset account for precise control.
How do I use interest rate arbitrage within a split?
Place surplus cash into the offset tied to the split where it achieves the greatest interest reduction, while preserving liquidity.
