Advantages

• Competitive interest rates over a variety of fixed and variable loan types.
• Flexibility – you can choose which portion you would like to fix and which portion you would like to be on variable terms.
• You can choose loan options that suit your needs.
• Fixed rate portion offers rate and repayment security and peace of mind.
• The variable rate gives you repayment flexibility and an offset account
• Split loans are often ideal for property investors. Many keep their owner-occupier loan on a variable rate, while the investment property loan is kept to fixed terms in a bid to assist with the management of cash flow for the loan/property investment.

Disadvantages

• By splitting your loans you limit the upside benefits in the event of interest rate reductions
• There are penalties if you wish to break a fixed rate
• You cannot refinance to another institution (potentially) during the fixed rate period