Splitting your home loan marries the flexibility of a variable rate loan with the stability of a fixed rate loan to reduce the impact of any interest rate changes. Split loans are especially popular when interest rates are increasing. By splitting a loan, borrowers can be protected against the risk of higher rates. If interest rates increase the fixed portion repayments will remain the same but the variable portion repayments will increase. But if interest rates decrease then the variable portion of the loan will be repaid faster. The loan can be divided equally or split into different amounts, eg 60% fixed and 40% variable. Split loans can be customised to take advantage of the various features that different loans have to provide. The features available with this type of debt make it particularly attractive for first time borrowers.