Property Purchase Loans
What Loan Structure Should You Use?
5 min read- Finance Guide
- Updated 2026
Quick answer
Many borrowers aim to keep the core loan at
80% or below
to reduce costs and keep structure options open
- Common structure choice Split loan
- Offset feature Usually variable only
- Standard loan term Up to 30 years
1300 421 044
1300 421 044
Detailed explained
A good loan structure is not just about chasing the lowest headline rate. It is about matching the loan to the way you earn, spend, save and hold property. Some borrowers want predictable repayments, some want maximum flexibility, and some need to separate owner occupied debt from investment debt for cleaner management over time.
Core structure options
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Variable loans usually offer the greatest flexibility, often including offset accounts, redraw and unlimited extra repayments
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Fixed loans can provide repayment certainty for a set term, but often come with tighter limits on extra repayments and potential break costs
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Split loans combine fixed and variable portions so you can balance stability with flexibility
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Interest only periods may suit some borrowers in specific scenarios, but principal and interest is often the standard structure for owner occupiers
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STRUCTURE SNAPSHOT
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Flexible portion
variable or split
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Certainty portion
fixed if needed
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Feature trade off
More certainty can mean less flexibility depending on the lender and product
How loan structure decisions are usually made
Budget
01
Work out whether cash flow certainty or loan flexibility matters more to you
Features
02
Compare whether you need offset, redraw, extra repayments or the ability to split the loan
Product fit
03
Choose between variable, fixed or split based on the product features and your plans
Settlement
04
The lender then assesses whether the selected structure fits policy, serviceability and the property purpose
What lenders look at when reviewing structure
Income
Income and cash flow stability
Existing debts
Existing debts and total commitments
Living expenses and dependants
Living expenses and future affordability
Deposite or equity position
Deposit, equity and loan to value ratio
Credit conduct and repayment history
Credit history and repayment conduct
Property type, condition and location
Property purpose, owner occupied or investment, and product suitability
APRA DTI limit — from February 2026
APRA limits the share of new residential lending at debt to income ratios of 6 or more, with separate caps for owner occupied and investment lending by authorised deposit taking institutions
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How the structure works after settlement
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01. A variable loan may let you reduce interest with offset or redraw while keeping flexibility
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02. A fixed loan can protect against rate rises during the fixed term, but flexibility is often reduced
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03. A split loan can spread risk by keeping one portion stable and one portion flexible
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03. Your structure can often be reviewed later through refinance, but changing a fixed loan early may trigger costs
Common problems
The wrong loan structure can create friction even when the loan is approved. Problems usually happen when borrowers focus only on rate and overlook flexibility, future plans or how the property will actually be used
Too much fixed debt
A fully fixed structure can feel restrictive if you later want to sell, refinance, make large extra repayments or access funds.
Possible solutions include:
Use a split instead of fixing the entire loan- Keep some debt variable if offset or redraw matters
- Check extra repayment caps before committing
- Understand possible break costs before fixing
Using the wrong features
Borrowers sometimes pay for features they barely use, or choose redraw when everyday access to cash would make offset more suitable.
Possible solutions include:
- Match features to your real cash flow habits
- Compare offset costs against likely interest savings
- Check whether redraw access rules suit your plans
- Avoid complexity that does not add practical value
Tax and ownership confusion
Mixing personal and investment goals inside one structure can create confusion later, especially if you plan to convert a home into an investment or buy again.
Possible solutions include:
- Keep clear records of loan purpose and structure
- Consider separate splits for different purposes where appropriate
- Review ownership and borrowing strategy before settlement
- Get tailored credit and tax advice for more complex plans
Steps to choose the right structure
Step
01
Decide whether certainty, flexibility or a balance of both matters most.
Step
02
Compare variable, fixed and split options with the features you actually need.
Step
03
Check whether offset, redraw or interest only is available on the chosen product.
Step
04
Confirm the structure fits the property purpose and your expected time horizon.
Step
05
Review fees, break costs, repayment limits and package conditions before signing.
Step
06
Settle the loan and review the structure over time as your plans change.
Speak with a Property Finance Specialist
Loan structures can vary significantly depending on whether the property is owner occupied or investment, how important flexibility is, and whether you want certainty on all or part of the debt.
A specialist can compare products and help work out which structure may suit your goals, cash flow and timeframe.
Speak with a finance specialist about your property loan structure
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