What is a split home loan?
A split home loan divides your total loan into separate portions. One portion can be on a fixed interest rate while the other remains on a variable interest rate.
This can combine the repayment certainty of a fixed rate with some of the flexibility commonly available on variable loans.
How does the calculator split your loan?
You choose the percentage to fix using the slider. The remaining percentage becomes variable automatically. Each portion is then calculated as a separate principal-and-interest loan before the repayments are combined.
What does the fixed portion provide?
A fixed-rate portion can provide greater repayment certainty during the fixed period because the interest rate on that portion does not move with ordinary variable-rate changes during the agreed term.
Fixed loans may also have restrictions on additional repayments, redraw or offset features, and break costs can apply in some circumstances.
What does the variable portion provide?
A variable-rate portion can move when the lender changes its variable rate. Depending on the product, it may also offer features such as an offset account, redraw or more flexible extra repayments.
If variable rates fall, the variable portion may benefit; if rates rise, repayments on that portion may increase.
Split loan FAQs
Can I choose any split percentage?
Many lenders allow borrowers to choose how much is fixed and how much is variable, subject to the lender's minimum loan-split amounts and product rules.
Can the variable portion have an offset account?
Some variable home loan products can be linked to an offset account. Fixed portions commonly have more restricted feature sets. Product rules vary by lender.
What happens when the fixed period ends?
The lender generally moves that portion to an applicable revert or variable rate unless you arrange another fixed term or restructure the loan. This calculator uses the entered variable rate as a simple post-fixed-period assumption.
Does this calculator predict future variable rates?
No. The variable rate entered is held constant for modelling purposes. Future interest rates cannot be known in advance.