The Finance Algorithm

Loan Structure Planner

Sketch a fixed and variable split, repayment type and features from your purpose, deposit and appetite for rate risk.

Updated October 2026Built and checked by MaverickHow it's calculatedReport an error

Your numbers

Updates as you type
$
$750k
$
$150k
$
$100k

The button asks our AI to explain these figures in words.

Loan structure: First Home

Starting split

40/60

fixed / variable

Repayment type

P&I

Principal & Interest

Estimated loan

$650,000

4.3× household income

Est. LVR

87%

LMI applies

Fixed vs variable proportion

Fixed is the coloured portion: variable lets you offset and overpay.

100%Starting structure
Feature checklist
Offset account
Fits your answers
Redraw facility
Fits your answers
Interest-only repayments
Not needed
Extra repayments allowed
Fits your answers
Salary direct-credit to offset
Fits your answers
40% fixed for budget certainty
With a medium tolerance for rate risk, fixing 40% ($260,000) keeps most of the repayment steady. A shorter fixed term means less exposure to break costs if you sell or refinance.
60% variable with offset
The variable portion ($390,000) is where extra repayments and an offset account usually go. Money in an offset saves interest at the loan rate and stays available.
Principal & Interest
Principal and interest pays the balance down from the first repayment, so less interest is paid over the life of the loan than with interest-only.
LMI above 80%
At 87% LVR the lender will charge LMI. Another $50,000 of deposit would bring it to 80%.
First home buyer levers
The First Home Guarantee, Help to Buy, your state's grant and its stamp duty concession can change the deposit you need; the first home buyer schemes tool checks each against your price.
40/60 P&I with offset
A $750,000 first home with $100,000 of deposit means a $650,000 loan at 87% LVR, 4.3 times your $150,000 income. A 40% fixed / 60% variable split on principal & interest matches the answers you gave; it's a starting point to compare with lenders' products, not a recommendation. An offset is worth more the more cash you keep in it, so compare the interest it would save with any extra fee for an offset product.

How it works

A home loan can be fixed, variable or split between the two, paid principal and interest or interest-only, with or without an offset account. The planner works out your loan, LVR and loan-to-income ratio from your price, deposit and income, sketches a starting structure from your answers, and explains the trade-offs of each part at the RBA's average rates. It's general information to take to a lender or broker, not personal advice.

  1. 1Enter the property price, your deposit and household income
  2. 2Share your risk tolerance and goals
  3. 3See a starting structure and the reasons for each part

The figures today

As of 28 October 2026, the lowest variable home loan rate is 5.69%, from AAA Financial Corporation's Portfolio Loan, while the typical best across 102 institutions is 6.36%. The lowest 3-year fixed home loan rate is 6.09%, from Border Bank's Customs Value Home Loan, while the typical best across 79 institutions is 6.69%. The RBA cash rate is 4.60%. Those are for an owner-occupier paying principal and interest at an 80% LVR.

Home loan rates todayWho passed on the last RBA move

Worked examples

First Home Buyer Structure

Emma is buying her first home for $650k with $80k deposit, income $95k, low risk tolerance.

Purchase purpose
First Home
Property price or value
$650,000
Household income
$95,000
Available deposit
$80,000
Rate risk tolerance
Low - prefer fixed rates

Her loan is $570,000 at 88% LVR, so LMI applies unless she adds $50,000 to the deposit or uses the First Home Guarantee. Her low tolerance for rate risk points to a 70/30 split: $399,000 fixed for a steady repayment and $171,000 variable, where an offset and extra repayments go. At six times her income, the loan is at the level APRA limits banks' lending.

Investor Strategy

Marcus buying $580k investment property, $120k deposit, high income, wants tax benefits.

Purchase purpose
Investment Property
Property price or value
$580,000
Household income
$180,000
Available deposit
$120,000
Rate risk tolerance
High - chase lowest rate
Investment goals
Tax benefits

His loan is $460,000 at 79% LVR, 2.6 times his income. Fully variable and interest-only keeps repayments lowest during the interest-only period. If the property is an established home bought after 12 May 2026, from 1 July 2027 any loss can only offset residential property income and gains, not his salary.

Questions people ask

Should I get interest-only for my investment?
Interest on an investment loan is generally deductible whether you pay interest-only or principal and interest; interest-only keeps the balance, and so the deductible interest, higher. You don't build equity through repayments, and the loan switches to principal and interest when the period ends, so repayments rise. From 1 July 2027, losses on an established home bought after 12 May 2026 can only offset residential property income and gains.
What split ratio should I choose?
There's no standard ratio. Size the variable portion to hold the extra repayments and offset savings you expect over the fixed term, since fixed loans usually cap or bar extra repayments; the rest can be fixed for certainty. The split loan calculator shows the repayments for any ratio.

The terms, in plain English

Loan Structure
The overall configuration of your mortgage - including rate type (fixed/variable/split), repayment type (P&I/IO), and features (offset, redraw).
Interest-Only (IO)
Repayments that cover only the interest, not reducing the loan balance. Common for investors but the loan must convert to P&I eventually.
Principal & Interest (P&I)
Repayments that cover both interest and gradually pay down the loan balance. Standard for owner-occupiers.

Official sources

Calculate Split Scenarios

Model different fixed/variable split ratios.

Fixed vs Variable Comparison

Compare the costs of different rate structures.

Offset Account Benefits

See how an offset can work with your loan structure.