Compare split home loans
The table below compares home loans from our Online Partners that have the split interest rate feature available.
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About split home loans
If you’re keen to fix a portion of your loan, but don’t want to miss out on some of the appealing features of a variable home loan, a split home loan is a commonly-used compromise.
What is a split home loan?
A split home loan allows borrowers to split their home loan into two separate loans: one with a fixed rate and the other variable. It can be an option to consider for borrowers who want a level of certainty for their repayments and budget – via the fixed portion – and some of the flexibility typically offered by a variable loan.
Most lenders offer borrowers the ability to split their loan, but not necessarily on all of their products, so it can be worth checking whether a particular loan you are considering can be used as part of a split arrangement by using the table above.
How does a split loan work?
Split home loans generally work similarly to solely fixed or variable loans when it comes to how they are assessed by the lender and, if approved, the day-to-day running of the loan.
However, when you make your application you would need to outline:
- that you would like to split your loan
- which eligible fixed and variable products you wish to base the split on
- how much of the loan you want to fix and how much to make variable
Some lenders allow the borrower to decide how much to fix, but consider checking whether your lender applies a minimum dollar or percentage level for how the loan is divided.
As a hypothetical, a borrower might choose to split their loan so that 60% is fixed and 40% is variable. If the balance of the loan is $500,000, in this example the borrower would be charged a fixed rate of interest on $300,000 and a variable rate on the remaining $200,000 of the balance.
You can use Canstar’s split loan calculator to work out what your repayments would be based on different interest rates and split levels.
The borrower typically makes separate regular repayments on each of the loans, but may be able to arrange for these repayments to be made on the same day to help make budgeting more manageable.
If your loan is split, you usually have access to some or all of the features of each of the loan types, such as the ability to make additional repayments on the variable portion.
What happens at the end of a split loan fixed term?
At the end of the fixed term, the fixed portion of the loan is closed and the entire remaining balance will revert to a variable rate, unless you lock in a new split loan or other arrangement with your lender. Depending on the conditions of the loan, the revert rate could be the rate that applies to the variable portion of the split loan or a different, potentially higher, variable rate. Consider checking your lender’s policy for what happens at the end of the fixed term.
Frequently Asked Questions about split home loans
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About the authors
Ellie McLachlan, Former Content Lead
Joshua Sale, Group Manager, Research & Ratings
As Canstar’s Ratings Manager, Josh Sale is responsible for the methodology and delivery of Canstar’s Home Loans Star Ratings and Awards and the Home Loan Refinance Awards. With tertiary qualifications in economics and finance, Josh has worked behind the scenes for the last five years to develop Star Ratings and Awards that help connect consumers with the right home loan for them.
Josh is passionate about helping consumers get hands-on with their home loans, always reminding home buyers that finding the right loan can be as important for your finances as negotiating a fair property purchase price. Josh has been interviewed by media outlets such as the Australian Financial Review, news.com.au and Money Magazine, discussing topics including home loan equity and wider finance trends.
When it comes to Josh’s own property journey, the home loans expert once bought two houses in the same transaction when he ensured the cubby house his daughter loved was listed on the purchase contract for his new home.
You can follow Josh on LinkedIn, and Canstar on Twitter and Facebook.
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Important information
For those that love the detail
This advice is general and has not taken into account your objectives, financial situation or needs. Consider whether this advice is right for you.