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Floating Interest Rate Loans

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Standard Variable Rate Loan


ANZ Flexidraw

 

ANZ FlexiPlus (Revolving Credit)

Please note: If you find any of this confusing, don't worry we can explain it all to you in plain English and in the context of your situation and your financial goals.

 

Standard Variable Rate Loan

An ANZ Bank floating rate home loan offers flexibility to make lump sum loan repayments at any time. The loan can be repaid in full without notice and without penalty.

 

How a floating interest rate loan works

The cost of borrowing will fluctuate with changes in the interest rate market.  The loan is flexible and can usually be repaid in full without notice and without penalty.

Construction loans, re-draw and line of credit facilities, and other transactional loans generally operate with a floating (variable) interest rate.

The floating interest rate market is significantly affected by the Reserve Bank's management of monetary policy and the Official Cash Rate (OCR), which is reviewed 8 times per year.

 

A floating interest rate loan is best suited to

  • Customers who want to repay their loan faster and keep tighter control over their finances.
  • Customers who often have extra money they’d like to put towards their home loan.
  • Customers who want the flexibility to be able to take a loan repayment holiday or redraw funds.

 

Features and benefits of ANZ's variable rate loan

  • Maximum term: 30 years.
  • Repayment frequency: weekly, fortnightly or monthly.
  • Extra repayments: you can make additional loan payments anytime without penalty.

 

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ANZ Flexidraw

Any additional payments made towards a standard variable rate loan create a redraw amount on the customer’s loan.

ANZ Flexidraw explained

  1. Any additional payments you make towards ANZ's Standard variable rate loan create a redraw amount on the loan. 
  2. The extra repayments can be any repayments made over the minimum loan repayment amount (lump sum payments, regular additional payments, or any amount over-and-above the minimum repayment). 
  3. The extra payments, or the redraw amount, not only decrease the interest cost on your loan but they are also available for you to redraw at a later date.

 

Features and benefits of ANZ Flexidraw

  • The minimum redraw amount is $1,000.
  • KiwiSaver mortgage diversion contributions cannot be redrawn.
  • The ANZ Flexidraw fee is currently $5 per draw.  See more on fees and charges here.
  • ANZ Flexidraw is only available on ANZ Standard variable rate home loans (it is not available on fixed rates or ANZ FlexiPlus).
  • Once a loan balance reaches zero or goes into credit, any redraw amounts will no longer be available for redraw. 

 

The impact of ANZ Flexidraw on loan repayments

To ensure that you retain your ANZ Flexidraw amount, a loan repayment is always calculated on the current outstanding loan balance plus any redraw amounts available. In other words it is calculated on the original loan amount.  This ensures that additional deposits that you have made toward your loan are not eaten away by repayments that do not cover the loan (including the redraw amount).

For example, say you have a $200,000 loan and make a lump sum repayment of $100,000. This would give you a current loan balance of $100,000 plus a redraw amount of $100,000. Your loan repayments would continue at the same rate (i.e. as calculated on the $200,000 loan). This keeps the redraw amount of $100,000 intact for you to redraw at a later stage should you wish to.

Should you wish to have your repayments set at a level based on the new loan amount, you can request to have your redraw facility removed and repayments reduced.  Note: Once a redraw amount is reduced it cannot be reinstated (without a new loan application). 

 

Changes and restructuring to existing ANZ Flexidraw loans

Any redraw amount built up will be reduced to zero whenever any loan restructures are completed (i.e. a top-up or transfer to a fixed rate loan).

Once the redraw amount has been reduced to zero, these funds are no longer available to you via ANZ Flexidraw.

 

ANZ Flexidraw and loan repayment holidays

You may not always be able to access your ANZ Flexidraw amount during a loan repayment holiday.

 

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ANZ FlexiPlus (Revolving Credit)

An all-in-one home loan and transaction account that uses all available surplus funds to help reduce interest costs and pay off the loan sooner.

 

How revolving credit works

A revolving credit loan is a transactional account that is very similar to an overdraft.  Some revolving credit loans have a reducing loan limit which will amortise (reduce) in the same way a normal table loan is repaid. Other revolving credit accounts are non-reducing and therefore similar to interest only loan facilities. Interest is charged on the daily outstanding balance.

By paying your salary (and any other income) directly into your revolving credit loan you immediately lower your loan account balance and the amount of interest you pay.

If you use your credit card for your everyday purchases, you can keep your revolving credit account balance lower for longer. To maximise the benefit, you must always pay your credit card balance in full on the due date.

See here for an explanation of how to manage a revolving credit loan.

 

Revolving credit is best suited to

  • Customers on a good income who often have surplus funds available.
  • Customers who are good money managers.

  • Customers what want an ongoing credit limit that can be accessed at any time.

  • Customers wanting flexibility to make repayments and redraw up to their credit limit without needing to re-apply.

 

Features and benefits of ANZ FlexiPlus revolving credit

  • Minimum loan: $10,000.
  • Maximum loan: $350,000.
  • Maximum term: no set term.
  • Repayment frequency: anytime.
  • Extra repayments: anytime without penalty.
  • Salary must be direct credited to ANZ FlexiPlus account.
  • FlexiPlus account fee is currently $12.50 per month.  
  • See ANZ's fees and charges.

 

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