Split home loans: fixing across terms and keeping some floating

A split loan divides your mortgage into parts, each with its own rate and term: for example some on a one-year fixed rate, some on three years and some floating. Each part is worked out as its own loan, and you pay the total. On a $600,000 loan over 30 years split $100,000 floating at 6.31%, $250,000 fixed for one year at 5.06% and $250,000 fixed for three years at 5.59% (average rates as at 10 November 2026), the repayments are $619.63, $1,351.24 and $1,433.63: $3,404.50 a month in total. That is more than fixing everything for a year ($3,242.97), but it spreads the refix dates and keeps $100,000 free for extra repayments. This guide is general information, not financial advice.

How a split loan works

In a split loan, your bank sets up two or more loan accounts under the same mortgage. Each one has its own:

• Amount, which you choose.
• Rate type and term: fixed for 6 months to 5 years, or floating.
• Repayment, worked out separately on that part's balance and rate.

Kiwibank says "You can split your home loan into multiple loans and choose to have more than one fixed loan," and that the parts can be combined with a variable rate, offset or revolving loan. Sorted's advice for calculating repayments is the same as ours: "If your mortgage is split between fixed and floating, work out the fixed and floating amounts separately." ANZ's home loan handbook includes split examples, such as $340,000 split into $170,000 on a one-year fixed rate and $170,000 on two years.

The total repayment is simply the sum of the parts. Each fixed part follows its own rules for extra repayments and break fees; the floating part can usually be repaid at any time.

Worked example: $600,000 in three parts

Here is a $600,000 loan over 30 years, monthly, split into three parts at the average of the five main banks' lowest advertised rates, rates as at 10 November 2026.

For comparison, the same $600,000 unsplit:

The split costs $161.53 a month more than fixing everything for one year, mostly because the floating part carries the highest rate. It costs $36.20 a month less than fixing everything for three years. What you get for that cost is structure: one part refixes next year, another in three years, and $100,000 can take extra repayments and lump sums without any break fee.

Splitting does not change how much you owe, but the mix of rates changes how fast it falls. After a year, the split loan's balances add up to about $591,879, against $591,243 if everything had been on the one-year rate. First-year interest is $32,734 against $30,159, because two of the three parts carry higher rates than the one-year rate, so more of each repayment goes to interest. When each part refixes, the bank recalculates that part's repayment on its own balance and the years left.

The "blended" rate is the average of the three rates weighted by amount. It is a handy single figure, but the bank charges each part its own rate. Our fixed vs floating calculator lets you set up your own split.

Why people split

Spreading refix dates

If the whole loan refixes on one day, the whole loan takes whatever rate applies that day. Splitting spreads the dates, so no single rate change hits all of it at once. As an illustration only, not a forecast: if rates were 1 percentage point higher when the one-year part refixed, that part's repayment would rise from $1,351.24 to $1,504.79, an increase of $153.55 a month. Had the whole $600,000 been on the one-year rate, the same rise would lift the repayment from $3,242.97 to $3,611.50, an increase of $368.53. The same works in reverse if rates are lower: a split shares in a fall more slowly.

Room for extra repayments

Fixed parts limit extra repayments: ANZ allows up to $250 a week more plus a 5% lump sum a year, and BNZ and Kiwibank up to 5% a year (we have not confirmed ASB or Westpac). A floating part has no such limit. Kiwibank suggests keeping part of the loan on a variable rate if you expect to repay more than the allowance. In our example, paying an extra $500 a month on the $100,000 floating part would clear it in about 10 years and 1 month and save about $87,666 of interest on that part, if its rate stayed at 6.31%. See extra repayments.

Revolving credit or offset as the floating part

Many people make the floating part a revolving credit or offset loan. With an offset loan, interest is charged on the loan less the money in linked accounts; Kiwibank's offset ratio is 1, so "each $1 in an offset account offsets $1 of lending". Your savings reduce the interest while staying available. As at 10 November 2026 the interest.co.nz table lists offset loans at floating rates, for example Kiwibank's Offset Mortgage at 6.25% and Westpac's Choices Offset at 6.39%.

Less break fee exposure

If you need to sell or repay early, only the fixed parts can carry break fees, and each part's fee depends on its own rate and time left. See break fees.

The trade-offs

• More to manage. Several refix dates means several decisions. Put the dates in your calendar.
• The floating part costs more today. As at 10 November 2026, floating rates are above every fixed term, so keeping too much floating raises your repayment. Size it to what you realistically expect to repay early or keep in an offset account.
• A split does not beat the market. It smooths the effect of rate changes; it does not make the loan cheaper on average. Some parts will turn out to have been on a better rate than others.
• Minimums and fees. Banks may have minimum amounts per part or fees for some loan types. Ask before you set it up.

Setting up or changing a split

The easiest time to change your split is when a fixed part expires, because there is no break fee on that part (see how to refix). You can split the expiring part again, add it to floating, or join it to another part when that part also expires. A few practical points:

1. Start with the floating part. Work out how much you might repay early, or how much savings you could keep in an offset account, over the next year or two.
2. Spread the fixed parts. Two or three fixed parts on different terms spreads your refix dates.
3. Check the repayment total. Make sure the combined repayment fits your budget at today's rates and with some headroom for higher rates.
4. Line up frequencies. Ask whether each part can repay weekly, fortnightly or monthly. Matching them to your pay keeps things simple; see fortnightly vs monthly.

This guide is general information, not financial advice. Rates as at 10 November 2026, the average of the five main banks' lowest advertised rates in the interest.co.nz table, which shows no date of its own. Current rates are on our mortgage rates page.

Questions people ask

What is a split mortgage?

A home loan divided into two or more parts, each with its own rate and term, such as part fixed for one year, part fixed for three years and part floating. Each part's repayment is worked out separately and you pay the total.

Is a split loan cheaper?

Not on its own. It spreads the effect of rate changes and keeps some of the loan flexible. On our $600,000 example, the split costs $3,404.50 a month against $3,242.97 for all one-year fixed, as at 10 November 2026, mainly because of the floating part.

How many splits should I have?

There is no rule. Many people use two or three parts, with at least one floating or offset part if they expect to repay extra. More parts means more refix dates to manage.

Can I change my split later?

Yes, most easily when a fixed part expires, since there is no break fee then. Changing a fixed part before it expires may cost a break fee.