Split loans share many benefits and drawbacks with other loan types, and also have their own unique quirks.
For example, you won't be able to easily refinance the fixed portion of the loan during the fixed rate term due to the break costs involved, and if variable rates rise during the term, you may be in for some bill shock once you revert to a variable rate. Also, the revert rate on your fixed portion may not be the same as the variable rate that on your variable portion - you could find that you're paying interest at two different variable rates, unless you choose to refinance and remove the split at this stage.
A split loan may also let you benefit from access to flexible features, such as an offset account or a redraw facility, and the ability to make additional repayments on the variable rate portion, while also benefiting from more consistent repayments from the portion with the fixed interest rate. These features aren't always available with typical fixed home loans, which could make a split loan useful to some borrowers.
Whether you choose a variable, fixed or split rate home loan, it's important to look at more than just the advertised home loan interest rates. Sometimes low rate home loans charge high fees, costing you more overall than some other loans with higher rates and low or no fees. A quick way to estimate the value of different mortgage deals is to look at the comparison rate, which combines the cost of interest and standard fees into a single percentage.
Before applying for a split loan, consider contacting a mortgage broker. These home loan experts can help you work out if a split rate will best suit your financial situation, guide you through comparing lending criteria for a variety of home loan options, and even help you complete the mortgage application process.