What is a split home loan in Australia?

A split home loan — also called a split rate mortgage or part-fixed, part-variable loan — is a home loan where the borrower divides the total loan balance between a fixed rate component and a variable rate component. The fixed portion has a locked interest rate for a set period (commonly 1–5 years), providing certainty on that part of the repayment. The variable portion moves with market rates and typically allows offset accounts, unlimited extra repayments, and redraw access. Most Australian lenders offer split loans, and borrowers can usually choose any ratio — 50/50, 70/30, 80/20, or any other proportion — subject to lender minimums.

What is a good fixed/variable split ratio?

There is no universally correct split ratio — the right proportion depends on your financial situation, risk tolerance, and how much flexibility you need. As a starting point: fix the proportion of your loan where you need repayment certainty, and keep variable the portion from which you expect to draw offset, make extra repayments, or which represents a portion of the loan you may need to access or exit. A common starting point is 50/50 or 60% fixed / 40% variable, but many borrowers end up at ratios that match their specific circumstances rather than a round number.

Can I have an offset account on a split loan?

An offset account can generally only be linked to the variable portion of a split loan — not the fixed portion. This is because offset accounts are a feature of variable rate products, and fixed rate products typically do not support them. The practical implication is that the offset balance only reduces interest on the variable component. If maximising your offset benefit is a priority, a larger variable portion gives more of your loan balance access to the offset saving. Confirm offset availability and conditions with the specific lender before applying.

What are split loan break costs?

Break costs — also called early repayment fees or economic costs — apply when you exit, refinance, or make extra repayments above the allowed annual limit on the fixed portion of your loan before the fixed term expires. Break costs are calculated by the lender based on the difference between the wholesale interest rate at the time your loan was priced and the current wholesale rate, applied to the outstanding fixed balance for the remaining fixed term. In a rising rate environment, break costs are typically low or nil. In a falling rate environment, they can be substantial — sometimes tens of thousands of dollars. Always check the break cost before refinancing a split loan.

Can I make extra repayments on a split home loan?

You can generally make unlimited extra repayments on the variable portion of a split loan. Extra repayments on the fixed portion are typically limited — most lenders cap fixed-rate extra repayments at $10,000 per year, though this limit varies by lender and product. Extra repayments above the fixed-rate limit trigger break costs. Payments made to the variable portion reduce the principal balance and can meaningfully shorten the loan term and reduce total interest. If extra repayments are a priority, size the variable portion accordingly.

Is a split loan better than fully fixed or fully variable?

Neither option is objectively better — they serve different needs. A split loan provides a middle ground: rate certainty on part of the loan with flexibility on the rest. Whether that trade-off is superior to fully fixed or fully variable depends on what variable rates do over the fixed term (which is unknowable in advance), how much you value offset and extra repayment flexibility, and whether your financial situation requires certainty on the full balance or only part of it. This calculator allows you to model the full cost comparison of all three structures side-by-side with your actual numbers, which is more useful than a general recommendation.

What happens when the fixed portion expires on a split loan?

When the fixed period ends, the fixed portion typically rolls onto the lender's standard variable rate (the "revert rate"), which is often higher than the best available variable rates in the market. At this point, you have several options: let it revert, negotiate a new fixed rate for that portion, move to fully variable, change the split ratio, or refinance the entire loan to a new product. The revert rate is one of the most commonly overlooked costs in fixed-rate and split-rate lending. Build a reminder to review the loan at least 90 days before the fixed term expires.

What is the minimum fixed portion on a split loan?

Most Australian lenders impose a minimum amount for the fixed component of a split loan — commonly $50,000 to $100,000, though this varies. Some lenders also set minimum variable portions. The practical implication is that very small fixed or variable portions (e.g. 5% or 10% of the loan) may not be available from all lenders. Check the specific product's conditions and minimums when comparing split loan options. LoanGorilla's comparison includes product features and conditions, not just rates.

Does a split loan affect borrowing power?

A split loan does not inherently change your borrowing power relative to a standard variable or fixed rate loan of the same amount. Lenders assess serviceability based on the combined repayment across both portions, using a minimum assessment rate (typically the actual rate plus a 3% buffer, or a floor rate, whichever is higher). The rate used for the buffer calculation may vary between fixed and variable portions depending on the lender's policy. Your mortgage broker can confirm how serviceability is assessed for split loans with specific lenders.

How does LoanGorilla compare split home loans?

LoanGorilla compares split home loan products from 100+ Australian lenders including major banks, non-major banks, and specialist lenders. You can filter by fixed rate term (1, 2, 3, or 5 years), compare the fixed and variable rates on offer, and check product features including offset account availability, extra repayment limits, break cost policy, and revert rates. The comparison has no impact on your credit score.

Fixed or Variable? You Don't Have to Choose.

A split home loan lets you fix part of your loan for rate certainty and keep the rest variable for flexibility — offset, extra repayments, and the upside if rates fall. Model any split ratio and see how it affects your combined repayment, total interest, and the protection the fixed portion really provides.

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Model Any Fixed/Variable Split

Who this calculator is for

Borrowers who want rate certainty on part of their loan but don't want to lock everything into a fixed rate.
Homeowners approaching a fixed rate expiry, weighing whether to re-fix, go variable, or split.
First home buyers who want to protect part of their repayment while keeping offset access on the variable portion.
Anyone wanting to stress-test different fixed/variable ratios before committing.

What it calculates

Repayment for the fixed portion, the variable portion, and your combined total per period.
Total interest under different split ratios — 50/50 vs 70/30 vs 80/20.
The cost or saving of locking in vs going fully variable, given a rate differential.
Side-by-side scenarios: 100% fixed vs your split vs 100% variable.
Rate sensitivity: combined repayment if the variable rate rises 0.5%, 1.0%, 2.0%.

Why it matters

Split loans are popular because they sound like the best of both worlds — and often are, when structured correctly. The risk is treating the split ratio as set-and-forget. The fixed/variable proportion determines how much of your loan is protected from rate rises, how much is eligible for offset, and what break costs apply if you exit early. Getting the ratio right for your specific situation is where this calculator earns its keep.

Split Loan Calculator

Total Loan Amount$700,000

$100k$2M

Fixed Portion50% / 50%

Fixed: $350,000Variable: $350,000

Fixed Rate6.09%

Variable Rate6.29%

Loan Term30 years

10 years30 years

Repayment Frequency

Offset Balance (variable portion)$0

$0$350,000

Extra Repayment per period (variable)$0

$0$2,000

Your Split Loan Estimate

Combined monthly Repayment

$4,283

Fixed portion

$2,119

$350,000 @ 6.09%

Variable portion

$2,164

$350,000 @ 6.29%

Total interest — fixed$412,740

Total interest — variable$429,085

Combined total interest$841,824

Side-by-side: 100% Fixed vs your Split vs 100% Variable

Scenario

Monthly

Total interest

100% Fixed

$4,237

$825,479

50/50 Split (current)

$4,283

$841,824

100% Variable

$4,328

$858,169

Scenarios assume no offset and no extra repayments — they isolate the rate-structure trade-off.

Rate sensitivity — what if the variable rate rises?

Variable rate change

New combined monthly

Increase per month

+0.5% on variable portion

$4,398

+$115

+1.0% on variable portion

$4,516

+$233

+2.0% on variable portion

$4,758

+$475

The fixed portion is unaffected by variable rate movements — this is the "protection" your split provides in dollar terms.

Ready to find a split loan that fits your ratio?

LoanGorilla compares split home loans from 100+ Australian lenders — including competitive fixed rates, offset-linked variable products, and flexible split arrangements — in seconds, with no impact on your credit score.

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How this Split Loan Calculator works

Two separate loan components, one combined result

A split loan is technically two sub-loans sitting under one mortgage account. The fixed component uses standard amortisation: the repayment is the amount needed to fully repay the fixed balance at the fixed rate over the loan term in equal periodic instalments. The variable component does the same — but can also account for an offset balance and extra repayments, both of which reduce the effective balance on which interest is charged.

The combined repayment is simply the sum of the two component repayments. What makes split loans more complex than a single-rate loan is that the two portions behave differently over time: the fixed portion is locked in, while the variable portion responds to rate changes, offset balances, and any additional payments you make.

How the fixed rate component works

During the fixed period, the repayment on the fixed portion is set at the outset and does not change. If variable rates rise, the fixed portion is unaffected. If variable rates fall, the fixed portion also doesn't benefit — you are locked in. The fixed portion typically does not allow offset accounts or penalty-free extra repayments beyond a specified annual limit (commonly $10,000 per year, though this varies by lender and product). Breaking out of the fixed rate early generally incurs a break cost, calculated based on how far current wholesale rates have moved from the rate at which your loan was priced.

How the variable rate component works

The variable portion operates like a standard variable rate home loan. If you have an offset account linked to this portion, the offset balance reduces the daily balance on which interest is calculated — lowering the interest component of each repayment without actually reducing the loan balance itself. Extra repayments to the variable portion reduce the outstanding principal, shortening the effective term and reducing total interest. The variable portion's repayment changes if the lender adjusts the variable rate in response to RBA cash rate decisions or funding cost movements.

The rate differential matters

The benefit of the fixed portion depends on what variable rates do after you fix. If variable rates rise above your fixed rate, the fixed portion saves you money relative to being fully variable. If they fall below your fixed rate, the fixed portion costs you. The rate sensitivity output models a 0.5%, 1.0%, or 2.0% variable rate rise — so you can see the protection the fixed portion actually provides in dollar terms, not just conceptually.

How to interpret your results

The combined repayment is your real budget number — not the fixed portion and not the variable portion individually. Both portions draw from the same account on the same schedule. The combined total is what your household cash flow needs to support.
The variable portion is where flexibility lives — your offset, extra repayments, and redraw all operate on the variable portion only. The bigger the variable portion, the more flexibility you retain. The bigger the fixed portion, the more rate certainty you have. Neither is right or wrong; the question is which matters more for your situation.
Rate sensitivity shows what you're actually protected against — if the variable rate rises 2.0% and your combined repayment only increases by $420/month (because 60% of your loan is fixed), that's a concrete representation of the value of the fixed portion.
The side-by-side scenario shows the cost of certainty — in a stable or falling rate environment, fully variable often shows lower total interest than a split or fully fixed loan, because fixed rates typically include a premium for certainty. The gap between scenarios is the price of that certainty.
Offset on the variable portion compounds over time — even a modest offset balance of $20,000–$50,000 on the variable portion meaningfully reduces total interest over a 25–30 year term.

How to find the right split ratio

Start with your cash flow risk tolerance, not a round number. 50/50 is not inherently better than 60/40 or 70/30. The right fixed proportion is the amount where you genuinely need certainty — typically enough that a 2.0% rate rise on the remaining variable portion is manageable within your monthly budget. Use the rate sensitivity output to find that threshold.
Check what offset balance you can realistically hold. Offset only benefits the variable portion. If you have significant savings to park in offset, a larger variable portion maximises that benefit. If your offset balance will be minimal, a larger fixed portion may make more sense.
Factor in fixed rate break cost risk. If there's any chance you may sell, refinance, or access equity during the fixed period, understand that break costs can be substantial — sometimes tens of thousands of dollars in a falling rate environment.
Align the fixed term with your planning horizon. A 2-year fixed makes sense if you have a specific near-term risk; a 5-year fixed makes sense if your income and housing situation are stable medium-term.
Review at fixed rate expiry, not just before. When the fixed portion reverts, the revert rate is often higher than market-best variable rates. Build a reminder at least 90 days before expiry.
Compare products, not just rates. Different lenders have different rules on fixed-portion extra repayment limits, break cost calculation methods, and whether offset is available. Compare the full structure, not just the headline number.

Example Split Loan Calculations in Australia

The table below compares four split structures on the same $700,000 loan at a fixed rate of 6.09% p.a. and a variable rate of 6.29% p.a., 30-year term, monthly repayments, no offset.

Split Structure	Fixed Portion	Variable Portion	Combined Monthly	Total Interest
100% Variable	—	$700,000	$4,333	$859,880
30% Fixed / 70% Variable	$210,000	$490,000	$4,307	$851,620
50% Fixed / 50% Variable	$350,000	$350,000	$4,283	$843,240
70% Fixed / 30% Variable	$490,000	$210,000	$4,259	$834,860
100% Fixed	$700,000	—	$4,234	$824,240

Assumptions

$700,000 loan | Fixed rate 6.09% p.a. | Variable rate 6.29% p.a. | 30-year term.
Monthly repayments | No offset balance | No extra repayments | Figures rounded to nearest $10.
In this scenario a higher fixed proportion produces slightly lower total interest because the fixed rate is below the variable rate. Model your actual scenario above — if variable rates fall or you apply an offset balance, the calculus changes.

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Calculator assumptions

Results are estimates based on standard amortisation principles and the inputs you provide. The fixed portion repayment is calculated as a standard amortising loan at the fixed rate over the full loan term. The variable portion repayment is calculated similarly, with any offset balance applied as a reduction to the principal balance for interest calculation and any extra repayments reducing the outstanding variable balance each period. The calculator assumes both portions carry the same loan term and repayment frequency. In practice, split loans may have different fixed-rate expiry dates, revert rates, and product conditions. Rate sensitivity assumes the variable rate rises by the specified amount from the start of the loan and remains there — this is a stress test, not a forecast. Break costs, application fees, and lender-specific conditions are not modelled. All figures in AUD. LoanGorilla compares home loans from 100+ Australian lenders. Reviewed by the LoanGorilla editorial team — last updated May 2026.