How to use our split home loan calculator
Here are the details you’ll need to enter about your home loan.
1
Loan amount
The total loan amount you’re borrowing from the bank, including both the fixed and variable portions.
2
Split loan amounts
The loan amounts of the fixed and variable portions. For example, $250,000 fixed and $300,000 variable.
3
Interest rates
The interest rates charged on the fixed and variable portions of the loan (e.g. 6.00% fixed and 6.49% variable).
4
Repayment types
Whether you’re making principal and interest or interest-only repayments. Most home loans have principal and interest repayments where you pay off the amount borrowed and the interest charged from the start.
5
Loan terms
The amount of years you’ll be paying off each portion of the total loan. Most new mortgages come with a 30-year loan term, with fixed rate durations generally ranging from 1-5 years.
After you’ve entered in these details, our calculator will give you an estimate of your split home loan repayments. You can choose to see weekly, fortnightly or monthly repayments.
Why split your home loan?
Splitting your home loan into fixed and variable parts is a way to hedge your bets. With this approach, you get the benefits of both types of loans. If interest rates rise, your fixed portion insulates you from higher repayments. However, if interest rates fall, you won’t feel the full benefit if you split.
- With the fixed portion, your interest rate is locked in for a set period (usually one to five years). This protects you against rate increases and makes part of the loan predictable.
- The variable portion of your loan lets you benefit from falling interest rates and access features like an offset account.
Most lenders allow you to choose how you split your loan. You can divide it equally based on your loan amount, or split it into percentages like 60/40 or 70/30, depending on what works best for you.
Is it better to have a split mortgage?
A split home loan can offer a balanced approach to managing your mortgage. But, whether it’s the right choice for you depends on your financial situation, risk tolerance and goals. Speak to a mortgage broker to see if a split loan aligns with your needs.
Split home loan pros and cons
Pros
- You get the stability of fixed rates and the flexibility of variable rates
- The fixed portion of your loan ensures repayments are predictable
- The variable portion often includes features that can help reduce interest costs and allow extra repayments or redraws
- You can tailor the split to suit your needs, such as an even 50/50 split or a 70/30 split to favour one type over the other
Cons
- In some cases, you may end up paying fees on two loans instead of just one
- If interest rates drop significantly, the fixed portion of your loan won’t benefit, potentially resulting in higher overall interest costs compared to a fully variable loan
- The fixed portion might mean you aren’t able to negotiate lower rates on your loan
- If you decide to change or cancel the fixed portion before the end of its term, you may face break fees or penalties
Split loan repayments example
This table estimates how much you’ll pay on a split home loan of $400,000.
Interest rate | |
Fixed loan portion* | 6.00% |
Variable loan portion | 6.49% |
Fixed term | |
Fixed loan portion* | 2 years |
Variable loan portion | N/A |
Estimated monthly repayments | |
Fixed loan portion* | $2,398 |
Variable loan portion | $2,526 |
| Fixed loan portion* | Variable loan portion | |
|---|---|---|
Interest rate | 6.00% | 6.49% |
Fixed term | 2 years | N/A |
Estimated monthly repayments | $2,398 | $2,526 |
