Key takeaways:
Split home loans combine fixed and variable rates, giving you some repayment certainty while keeping part of your loan variable.
Only the variable portion is directly exposed to variable rate changes during the fixed term.
Loan features can differ between portions, including access to offset, redraw and extra repayments.
There is no standard fixed-to-variable split. The structure should reflect your budget, loan features and plans.
Break costs may apply if you refinance, repay or restructure the fixed portion before the fixed term ends.
A split-rate home loan splits your mortgage between fixed and variable interest rates. This can give you more certainty over part of your repayments while retaining some of the flexibility of a variable rate.
However, each portion has its own interest rate, features and conditions.
Fixed portions may also restrict additional repayments and charge break costs if you refinance, sell or change the loan before the fixed term ends.
This guide explains how split rate home loans work, how they compare with fixed and variable loans and what can happen if you want to change or refinance a split loan.
Home loan interest rates: Where the market stands
The RBA cash rate target is 4.60% following a 0.25 percentage-point increase effective 30 September 2026.
Some lenders, including the Big Four banks, have announced 0.25 percentage-point variable-rate increases effective 9 October.
Market measure | Current position |
|---|---|
The RBA increased the cash rate by 0.25 percentage points to 4.60%, effective 30 September 2026. | |
The latest published RBA data at the time this article was published show average rates for new owner-occupier principal-and-interest loans were 6.15% p.a. (August, 2026). RBA lending-rate data a published monthly, so they do not yet reflect the September cash rate increase. | |
The average rate on outstanding owner-occupier principal-and-interest loans was 6.19% p.a. in August 2026, before the September cash rate increase. | |
Fixed rates vary by lender, fixed term, loan type and borrower circumstances. Aussie captures our lowest weekly rates in our Rates Round-up to give you an idea of the rates available. | |
Following the RBA's September decision, a number of lenders, including the big four banks, have announced they'll increase their variable home loan rates in line with the 0.25 percentage point cash rate rise. The timing of these changes varies between lenders, so it's worth checking when any increase will apply to your loan. Future rate movements remain uncertain and will depend on economic conditions and individual lenders' pricing decisions. To see how our lender panel has responded, take a look at our interest rate tracker. |
The cash rate has risen from 3.60% in late 2025 to 4.60% (as of September, 2026), changing the rate environment for borrowers considering whether to fix, stay variable or split their home loan.
Rather than trying to predict the next interest rate move, compare the rates, features and potential costs of each structure against your budget and plans.
What is a split rate home loan?
A split rate home loan, or split home loan, divides your loan into separate portions with different interest rate types. Typically, one portion has a fixed rate, and the other has a variable rate.
Interest is calculated separately on each portion. For example, a $600,000 home loan split 50:50 would have $300,000 charged at the applicable fixed rate and $300,000 at the applicable variable rate.
You do not have to split your loan evenly.
Depending on the lender and product, you may be able to choose a different ratio, such as 40% fixed and 60% variable, or divide your loan into more than two portions.
Available split structures, minimum amounts and loan features vary between lenders and products, so check how each portion will work before choosing a split.
How does a split home loan work?
With a split home loan, you pay interest on the fixed and variable portions separately. This means changes to the variable rate affect only the variable portion, while the fixed rate generally remains unchanged for the agreed fixed term.
For example, take an $800,000 home loan over 30 years, split 50:50:
Fixed portion: $400,000 at an illustrative 6.80% p.a.
Variable portion: $400,000 at an illustrative 6.20% p.a.
Assuming principal-and-interest repayments, the initial monthly repayments would be approximately:
Loan portion | Balance | Illustrative rate | Approx. monthly repayment |
|---|---|---|---|
$400,000 | 6.80% p.a. | $2,608 | |
$400,000 | 6.20% p.a. | $2,450 | |
Combined | $800,000 | — | $5,058 |
What happens if the variable rate changes?
If the variable rate increased by 0.25 percentage points from 6.20% p.a. to 6.45% p.a., assuming the increase applied from the start of the loan, the repayment on the $400,000 variable portion would rise from approximately $2,450 to $2,515 a month.
The fixed portion would remain approximately $2,608 a month during the fixed term, taking the combined repayment to around $5,123 a month. If the variable rate fell instead, repayments on that portion would generally decrease, subject to the lender's pricing and loan terms.
This illustrates the main purpose of splitting a home loan: only the variable portion is directly exposed to variable rate movements during the fixed term, rather than the entire loan.
Note: This is a simplified example for illustrative purposes only. Rates and repayments are rounded and do not represent a particular home loan product available through Aussie or predict future interest rates. Actual rates, repayments, fees and loan terms vary by lender, product and borrower circumstances.
Split vs variable vs fixed home loans: What's the difference?
The key difference between split, variable and fixed home loans is how the interest rate applies to your loan. A variable rate can change over time; a fixed rate stays the same for an agreed term, while a split home loan combines both.
Feature | Split home loan | ||
|---|---|---|---|
Rate structure | Fixed and variable portions | Variable | Fixed for an agreed term |
Rate certainty | Partial | No | Yes, during the fixed term |
Exposure to variable rate changes | Variable portion only | Entire loan | Generally none during the fixed term |
Offset account | May be available on the variable portion | Depends on the product | May be restricted or unavailable |
Extra repayments | May offer more flexibility on the variable portion | Depends on the product | May be capped or restricted |
Fixed-rate break costs | May apply to the fixed portion | Not applicable | May apply during the fixed term |
A variable rate home loan has an interest rate that can rise or fall over the life of the loan. Features such as offset accounts, redraw and extra repayments vary by product.
A fixed rate home loan locks in an interest rate for an agreed period, providing greater certainty over the rate and scheduled repayments during that term.
However, restrictions may apply to extra repayments and other features, and break costs may apply if you refinance, repay or make certain changes before the fixed term ends.
A split home loan combines both. The fixed portion provides some protection from variable rate increases during the fixed term. In contrast, the variable portion remains exposed to rate changes and may offer more flexible features, depending on the product.
You might also be interested in: Types of home loans in Australia: How to compare your options
Why consider splitting your home loan now?
The interest rate environment has changed, with four rate rises so far in 2026 and many lenders adjusting their variable rates to follow suit.
Fixing part of your loan may provide more certainty over the interest rate and scheduled repayments on that portion during the fixed term. Keeping the remainder variable means that portion remains exposed to rate changes, but may retain features such as an offset account, redraw or greater flexibility for extra repayments, depending on the product.
A split home loan does not remove interest rate risk, nor does it rely on predicting where rates will go next. Instead, it lets you balance some repayment certainty with some variable-rate flexibility.
Is a split home loan right for you?
Whether a split home loan suits you depends on how much repayment certainty and flexibility you want, the features you need and what you plan to do with your loan during the fixed term.
A split home loan may be worth it if you... | Another structure may be worth it if you... |
|---|---|
Want some repayment certainty without fixing your entire loan. | Want repayment certainty across your entire loan for an agreed fixed term. |
Can manage repayment changes if the rate on your variable portion rises. | Prefer more predictable repayments and have less capacity to absorb variable rate increases. |
Want variable-rate features on part of your loan, such as an offset account, where available. | Need particular features across your entire loan, rather than only the variable portion. |
Plan to make extra repayments through the variable portion or within any limits on the fixed portion. | Expect to make substantial extra repayments that could exceed fixed-rate limits. |
Expect to keep the fixed portion for its agreed term. | May sell, refinance or restructure during the fixed term, when break costs could apply. |
Are comfortable managing two loan portions with different rates, features and conditions. | Prefer the simplicity of one interest rate type across your loan. |
No single fixed-to-variable split suits every borrower. Your budget, capacity to manage higher repayments, need for features such as an offset account, plans for extra repayments, and likelihood of refinancing or selling can all influence which structure suits your circumstances.
What are the pros and cons of a split home loan?
A split home loan combines fixed and variable portions, so you get some of the benefits and trade-offs of both. Features, restrictions and costs depend on the lender and product.
Pros of a split home loan | Cons of a split home loan |
|---|---|
More repayment certainty: The rate on the fixed portion generally stays the same during the fixed term. | Variable repayments can change: If the variable rate rises, repayments on that portion may also increase. |
Less exposure to variable rate rises: Only the variable portion is directly affected by variable rate changes during the fixed term. | You may miss some benefit from rate falls: A lower variable rate generally won't apply to the fixed portion until its fixed term ends. |
Access to flexible features: The variable portion may offer an offset account, redraw or other features, depending on the product. | Features may be restricted: Offset, redraw and other features may be limited or unavailable on the fixed portion. |
More flexibility for extra repayments: You may be able to direct additional repayments to the variable portion. | Fixed-rate repayment limits may apply: Additional repayments on the fixed portion may be capped or restricted. |
Some benefit if variable rates fall: Interest and repayments on the variable portion may decrease if its rate falls. | Break costs may apply: Refinancing, repaying or making certain changes to the fixed portion before the fixed term ends may result in break costs. |
Choice over your split: Depending on the lender, you may be able to choose how much of your loan is fixed and variable. | More to manage: Each portion can have different rates, repayments, features and conditions. |
Before splitting your home loan, compare the rates, fees, features and conditions of both portions. Pay attention to offset and redraw access, extra repayment limits and potential fixed-rate break costs.
What do lenders consider when you apply for a split home loan?
Lenders generally assess split home loans using the same criteria as other home loans. The lender will also check whether your proposed fixed and variable portions meet its product requirements, which vary by lender. Key considerations may include:
Serviceability: The lender will assess your ability to repay the loan based on factors such as your income, expenses, debts and proposed repayments. For APRA-regulated banks, the mortgage serviceability buffer is currently 3 percentage points. Lenders may apply additional assessment policies, and criteria can vary.
Fixed and variable portions: Each portion must meet the requirements of the relevant product, including available rates, terms and features.
Minimum split amounts: Some lenders require a minimum balance for each portion, which can affect how you divide your loan.
Number of splits: A lender may limit the number of loan portions or accounts you can have.
Product eligibility: Available split options can depend on the lender, product, loan purpose and your circumstances. Not all fixed and variable products can be combined.
Meeting the product requirements does not guarantee home loan approval. Your application remains subject to the lender's eligibility, credit assessment and lending criteria.
How much of your home loan should you fix?
There is no standard fixed-to-variable ratio for a split home loan.
How much you fix should reflect the repayment certainty and flexibility you want, your loan plans and the options available from your lender. Consider:
Repayment certainty: The larger your fixed portion, the more of your loan has an agreed interest rate for the fixed term.
Your offset balance: If an offset account is only available on the variable portion, consider whether that portion is large enough for the amount you expect to hold in offset.
Extra repayments: Consider how much you may want to repay above the minimum and whether limits apply to the fixed portion. Aussie's extra repayments calculator can help you explore the potential impact of additional repayments.
Variable rate changes: The larger your variable portion, the more of your loan remains exposed to variable interest rate movements.
Plans to sell or refinance: If you may sell, refinance or restructure during the fixed term, consider the potential for fixed-rate break costs.
Fixed-term length: Think about how long you're comfortable committing part of your loan to a fixed rate.
Lender requirements: Minimum split amounts, available fixed terms, and the number of permitted loan portions vary by lender and product.
Examples of fixed and variable loan splits
Example split | How it works |
|---|---|
80% fixed / 20% variable | Most of the loan has a fixed rate, with a smaller portion exposed to variable rate changes. |
50% fixed / 50% variable | The loan is divided evenly between fixed and variable rates. |
30% fixed / 70% variable | Most of the loan remains variable, with a smaller portion fixed. |
These are examples only, not recommended ratios. The right split depends on your circumstances and the structures available from your lender.
Can you switch or refinance a split home loan?
Yes. You may be able to switch or refinance a split home loan if your current structure no longer suits your needs. Your options and potential costs will depend on your lender, loan terms and whether any portion is still fixed.
Can you switch a split home loan?
Depending on your lender and product, you may be able to change your split, move some or all of your loan to a variable rate, or restructure it into different portions. Before switching, check:
Whether your lender allows the change
Whether any portion is still within a fixed term
Any switching, discharge or other fees
Whether fixed-rate break costs could apply.
Depending on the changes requested, your lender may also require a new credit assessment.
Can you refinance a split home loan?
You may be able to refinance with your existing lender or move to another lender, subject to lending criteria and approval.
Refinancing can also let you change your loan structure; for example, moving to a fully variable loan or choosing a different fixed-to-variable split.
If part of your loan is still fixed, compare the cost of leaving your existing loan with the rates, fees and features of the proposed refinance before deciding.
You might also be interested in: Lenders lower stress test for refinancers
What happens to the fixed portion when you refinance?
Refinancing before the fixed term ends may trigger break costs.
These can vary depending on factors such as the lender, outstanding balance, time remaining on the fixed term and changes in wholesale interest rates.
Ask your lender for an estimate of any break costs before refinancing or making substantial changes to a fixed portion. Learn more about fixed-rate break costs.
You might also be interested in: Refinancing home loan options and interest rates
Is a split home loan worth considering?
A split home loan can combine some repayment certainty with some exposure to variable rate changes, while retaining variable-rate features such as an offset account or redraw on part of the loan.
But no single home loan structure or fixed-to-variable split suits everyone. The rates and features available, potential costs, your budget, and your plans to make extra repayments, refinance or sell can all affect which structure suits your circumstances.
An Aussie Broker can compare home loan options from participating lenders and help you understand the trade-offs between fixed, variable and split structures.
