Begin by preheating your oven to 160°C (320°F) with the fan function on (refer to note 1 if your oven doesn't have a fan setting). Grease or line two 8-inch cake tins—homemade cake release works great for this.

In a separate bowl, sift together the flour, cornstarch, baking powder, and salt. Use a whisk or fork to mix until fully combined, then set the dry mixture aside.

In a large mixing bowl, combine the butter, vegetable oil, white sugar, and brown sugar. Using an electric mixer (either hand-held or stand mixer—see note 2), cream the mixture for about 2 minutes until it becomes light and fluffy.

Add the eggs one at a time, mixing thoroughly between each addition (approximately 10–15 seconds per egg) to ensure they are fully incorporated.

Next, add in the sour cream and vanilla extract. Mix until smooth and combined. At this point, put the mixer away as the rest of the batter will be completed by hand.

Gently fold in half of the dry ingredients into the wet mixture using a spatula, mixing just until combined. Then pour in the milk and fold again until the mixture is just combined. Finally, add the remaining dry ingredients and fold gently, being careful not to overmix (see note 3).

Evenly divide the batter between the two prepared 8-inch cake tins. Bake for 28 to 30 minutes, or until a toothpick inserted into the center comes out clean.

Once baked, allow the cakes to cool in their pans for 15–20 minutes. Then carefully turn them out onto a wire rack and allow them to cool completely before applying the caramel frosting.

In a large saucepan over medium heat, combine the butter, sugar, evaporated milk, and salt. Stir continuously as everything melts together and begins to simmer. Once it starts to bubble, reduce the heat to low-medium.

Let the caramel mixture cook slowly for around one hour, stirring every few minutes to prevent burning. As the caramel thickens, you’ll need to stir more frequently—this is when it’s most likely to stick or scorch. When the caramel reaches a thick consistency and deep golden brown color (refer to video if available), stir in the cream and vanilla extract. Mix until the caramel is silky and smooth, then immediately transfer it to a heatproof dish.

Allow the caramel to cool for about 25 minutes before using it to frost the cake. It should still be warm and slightly runny when spreading, as it will begin to set quickly once applied (see note 4 if it thickens too much).

Once the cakes have cooled completely, use a serrated knife to level the tops so the layers are flat.

Place the first cake layer on your serving plate or cake stand, and spread a generous amount of the caramel frosting over the top using an offset spatula or knife.

Place the second cake layer on top, then cover the top and sides with the remaining caramel frosting. If the caramel seems too thin or isn’t setting up properly, refer to note 5. As the caramel sets, it will become shiny—at this stage, you can gently run an offset spatula or knife over the surface to smooth it out for a polished finish.

Decorate as desired and enjoy your rich, buttery, and perfectly sweet homemade caramel cake!