Split Loans
A split loan lets you divide your mortgage between a fixed portion and a variable portion, in whatever ratio you choose, rather than committing your entire loan to one or the other.
How a split loan works
You choose a split, commonly 50/50, but it can be any ratio a lender allows, and the loan is treated as two separate portions for interest rate and repayment purposes from that point forward. Each portion behaves exactly as a standalone fixed or variable loan would.
Why borrowers choose a split
- Hedging against rate uncertainty. If rates rise, your fixed portion is protected. If rates fall, your variable portion benefits.
- Partial access to features. You can attach an offset account to the variable portion while still getting rate certainty on the fixed portion.
- Flexibility without full commitment. You’re not betting your entire repayment on a single rate direction.
Choosing your split ratio
There’s no universally correct ratio, it depends on how much certainty you want versus how much flexibility you need:
- A higher fixed portion suits borrowers prioritising budget certainty, with a smaller variable slice kept mainly for offset account access.
- A higher variable portion suits borrowers who expect to make larger extra repayments or who want more flexibility to refinance later.
- An even 50/50 split is a common default when a borrower is genuinely undecided.
What to watch for
Each portion typically carries its own set of fees, and some lenders charge a fee for setting up or restructuring a split. The fixed portion still carries the usual fixed-rate restrictions, capped extra repayments and possible break costs, so a split doesn’t remove those trade-offs entirely, it just limits them to part of your loan rather than all of it.
Who a split loan suits
- Borrowers who can’t decide between fixed and variable and don’t want to choose one exclusively
- Anyone wanting partial protection from rate rises while keeping some flexibility
- Borrowers planning to make extra repayments on part of the loan while wanting certainty on the rest
FAQ
Some lenders allow you to adjust the split when your fixed portion’s term ends, or through a loan restructure, though this may involve fees or require reapplying.
Not necessarily. You can often choose different terms for the fixed portion (say, three years) while the variable portion continues indefinitely.
It depends on the lender. Some charge a small structuring fee for splits, others don’t, it’s worth checking the specific loan’s fee schedule before assuming a split costs more.