When borrowers can't decide between fixed and variable, we often suggest they don't have to. A split loan divides your mortgage into two or more parts, each with its own rate type and features.
How a split loan works
Say you have a $700,000 loan. You could split it:
- $350,000 fixed for 3 years
- $350,000 variable with an offset account
Each part has its own interest rate and repayment. You'll see two loan accounts, but it's one mortgage over one property.
Why people split
- Some certainty. The fixed portion protects part of your loan from rate rises.
- Some flexibility. The variable portion lets you make extra repayments and use an offset.
- Hedge against the unknown. If rates rise, half your loan is protected. If they fall, half your loan benefits.
Choosing the ratio
There's no perfect split. Some ways to think about it:
Fix your "baseline", keep your "flex" variable. Fix the portion you know you'll owe for years. Keep the amount you might pay down quickly, or that your savings will offset, variable.
Match your savings. If you have $80,000 in savings, keep at least $80,000 variable with an offset, so all of your savings reduce interest.
Match your budget sensitivity. If you need certainty for most of your repayment, fix more. If you have a buffer, fix less.
Common splits are 50/50, 60/40 or 70/30, but anything works.
Splits for other purposes
Splits aren't only about fixed and variable. They're also useful to:
- Separate investment and personal debt, for tax clarity
- Separate a renovation or car loan consolidated into your mortgage, so you can pay it down faster
- Have different terms, like a 5-year split for consolidated debts and 30 years for the rest
Costs and fees
Some lenders charge a small fee to set up or change splits. Fixed portions may have break costs if you pay them out early. Package loans often include unlimited splits.
A 2026 example
Kate and Arjun owe $640,000. They're worried about another rate rise but have $60,000 in savings.
- $400,000 fixed for 2 years
- $240,000 variable with their $60,000 in offset
If rates rise, their fixed repayment stays put. Their offset saves interest on the variable part, and they can make extra repayments there.
When a split might not suit
- If your loan is small, managing two portions might not be worth it
- If you strongly prefer one approach, a split may just dilute it
- If you plan to sell soon, the fixed portion could incur break costs
Frequently asked questions
Can I split my existing loan?
Yes. Most lenders let you split an existing loan. Fixing a portion is usually straightforward.
Can I have more than two splits?
Many lenders allow several. Too many can get confusing, so keep it purposeful.
Do both splits need the same term?
No. Many lenders let you set different terms for each split.
Thinking about a split? Call Finfident on 0424 545 654. We'll help you choose a ratio that matches your budget and savings.
This article is general information only and doesn't take into account your objectives, financial situation or needs. Figures, rates and scheme rules are current as at October 2026 and can change. Finfident Finance Brokers (ABN 94 679 280 801) is Credit Representative 569374 of Outsource Financial Pty Ltd (ACN 131 090 705), Australian Credit Licence 384324.