What is a split loan?

A split loan divides your home loan into separate portions, typically one at a fixed rate and one at a variable rate, all held under a single loan account. Instead of holding two entirely separate loans with different lenders, you manage one facility with multiple rate components.

Borrowers use split loans to balance predictability with flexibility. The fixed portion locks in certainty over a set term, protecting against rate rises on that amount. The variable portion allows access to lower starting rates and the option to redraw or pay down that section more quickly if rates fall or if your circumstances improve. This structure lets you hedge against interest rate movements across your home loan rather than betting entirely in one direction.

In Perth's market, split loans appeal to borrowers who want to manage risk across the housing cycle without holding multiple separate loans or paying multiple establishment fees. They are particularly useful when you expect rates to rise but still want some exposure to variable rate benefits, or when you want different payment strategies for different parts of your debt. A mortgage broker can help structure a split loan to match your repayment goals and rate outlook.

Most lenders offer split loan options, though the number of splits, rate combinations, and flexibility vary. Setup and ongoing management are typically simpler than managing separate loans across different institutions.