Split Home Loans: The Best of Both Worlds for Borrowers!

Shaun Chaudhry
Apr 15
2 min read

Choosing between a fixed or variable interest rate for your home loan can be tough—especially when market conditions are unpredictable. That’s where a split home loan comes in. It offers the best of both worlds by dividing your mortgage into fixed and variable portions, giving you both the certainty of steady repayments and the freedom to take advantage of rate drops.

What Is a Split Home Loan?

A split loan is a home loan that’s divided into two (or more) parts:

Fixed-rate portion – Locks in an interest rate for a set period, providing repayment consistency and protection from rising rates.
Variable-rate portion – Offers flexibility, allowing you to make extra repayments, access redraw facilities, and benefit if interest rates fall.

By combining these two, a split loan provides a smarter way to manage your mortgage in a changing financial landscape.

Benefits of a Split Home Loan

1. Protection from Rising Interest Rates: With part of your loan on a fixed rate, you’re shielded from sudden rate hikes, ensuring predictable repayments.

2. Freedom to Pay More, Save More: The variable portion allows for additional repayments without penalties—perfect for reducing your loan faster and saving on interest.

3. Lower Risk, More Stability: You get the security of fixed repayments with the flexibility of a variable loan, creating a balanced repayment structure.

4. Access to Handy Features: Offset accounts and redraw facilities often come with the variable portion, helping you cut down interest and access your funds when needed.

5. Adapt to Market Changes: As rates fluctuate, you can enjoy peace of mind with your fixed portion while still benefiting from lower rates on the variable side.

Is a Split Loan Right for You?

A split home loan could be ideal if you:

Want protection from interest rate increases
Like some certainty in your monthly repayments
Plan to make extra repayments or pay off your loan early
Want access to flexible features like redraw or offset accounts

How Proactive Lending Solutions Can Help

At Proactive Lending Solutions, we understand that every borrower’s situation is unique. That’s why we offer tailored advice and work with over 50 trusted lenders to find a home loan structure that suits your lifestyle and goals.

Whether you're refinancing, buying your first home, or just want to explore smarter ways to manage your mortgage, we’re here to help.