A split rate home loan combines both fixed and variable rates. For example, if the total loan amount is $400,000, the lender may offer $100,000 at a fixed interest rate and the remainder (which begins at exactly $300,000 but gradually declines as you make repayments) at a variable interest rate. Split rate loans are for borrowers who are unsure whether a totally fixed rate would be best for them. It allows them to hedge their bets.