Split Loan Calculator — Fixed & Variable Modelling

Model a split home loan with part fixed and part variable. See how different split ratios affect your total repayments and rate-change risk.

What Is a Split Home Loan?

A split home loan divides your total borrowing into two portions: one at a fixed interest rate and one at a variable rate. Each portion operates independently — you make separate repayments on each, and each has its own terms and conditions. This gives you partial protection against rate rises (the fixed portion) while retaining some flexibility and potential for rate cuts (the variable portion).

Most major Australian lenders offer split loans at no additional cost. You choose the split ratio at the time of application, and some lenders allow you to adjust the split later (though this may involve break costs on the fixed portion).

Choosing Your Split Ratio

There is no universally optimal split. The right ratio depends on your view of interest rates, your risk tolerance, and your need for flexibility. Common approaches include:

• 60/40 fixed/variable: The most popular split. Protects the majority of your loan from rate rises while keeping a meaningful variable portion for extra repayments and offset access.
• 50/50: Balanced hedge. Equal exposure to both scenarios.
• 70/30 or 80/20 fixed/variable: For borrowers who believe rates will rise and want maximum protection, keeping a small variable portion for flexibility.
• 30/70 fixed/variable: For borrowers who want to maximise offset account benefits and extra repayment flexibility while hedging a small portion.

Important Restrictions on the Fixed Portion

The fixed portion of a split loan typically has restrictions that the variable portion does not:

• No offset account — most lenders do not offer offset on fixed rate portions
• Limited extra repayments — typically capped at $10,000–$20,000 per year
• Break costs — if you refinance or pay off the fixed portion early, you may face significant break fees (potentially tens of thousands of dollars)
• No redraw — extra payments made to the fixed portion cannot be redrawn

This is why keeping some variable is valuable: your offset account, extra repayments, and redraw flexibility all apply to the variable portion only.

When Does the Fixed Period End?

At the end of the fixed term (1–5 years), the fixed portion automatically reverts to the lender's standard variable rate — which is usually higher than the best available rate. You should plan to review and either re-fix, switch to variable, or refinance before this revert happens. Set a reminder for 3 months before your fixed period expires.