One of the first structural decisions in any home loan is whether to fix, keep it variable, or split the two — a decision that has less to do with predicting the market than most people assume.
What each option actually offers
A fixed rate offers repayment certainty for a set period. A variable rate typically offers more flexibility — extra repayments, offset accounts, easier refinancing. A split loan blends the two in whatever proportion suits you.
What fixed loans typically restrict
Exiting a fixed rate period early can trigger break costs, and many fixed loans cap how much you can pay extra during the fixed term without a fee. These restrictions are worth understanding before committing, not discovering afterwards.
Why split loans exist at all
A split loan lets you hedge — certainty on part of the loan, flexibility on the rest. The right proportion is a personal decision based on how much certainty versus flexibility actually matters to you, not a one-size answer.
Chris Brown
Managing Director & Finance Broker at New Vision Financial Services, a credit representative under Australian Credit Licence 384704 and a member of the FBAA and AFCA. More about Chris →
Frequently asked
Can I change my mind after fixing my rate?
Yes, but exiting a fixed rate period early can trigger break costs, which vary by lender and how far into the term you are — worth checking before assuming it's a simple switch.
Is a split loan more expensive to set up?
Not necessarily, though some lenders charge a fee to establish a split structure. Ask your broker to compare the total cost against what you're trying to achieve.
How do I decide what proportion to split?
There's no universal answer — it comes down to how much repayment certainty you want versus how much flexibility, like offset or extra repayments, matters to you.