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Floating Interest Rate Loans

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Variable Rate Loan

 

ASB Orbit (Revolving Credit)

 

ASB Orbit FastTrack (Reducing 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.

 

Variable Rate Loan

ASB's variable interest rate home loan offers the benefits of a structured repayment plan with good flexibility to make lump sum repayments.

 

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, 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 often have extra money they’d like to put towards their home loan.
  • Customers who want the flexibility to make lump sum payments without penalty.
  • Customers who want to repay their loan faster and keep tighter control over their finances.

 

Features and benefits of ASB's variable rate loan

  • Maximum term: 30 years for owner occupied homes or 25 years for investment properties.
  • Repayment frequency: fortnightly or monthly.
  • Extra repayments: you can make additional loan payments anytime without penalty.

 

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ASB Orbit (Revolving Credit)

An ASB Orbit revolving credit is an all-in-one home loan and transaction account that uses all available surplus funds to help reduce interest costs and help you repay your 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.

ASB's Orbit revolving credit has a static (non-reducing) limit. 

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 ASB Orbit revolving credit

  • Orbit combines your cheque, savings and home loan accounts into a single easy to manage package.  
  • Minimum Orbit facility is $10,000.
  • Orbit is non-reducing.  Orbit FastTrack is ASB's reducing revolving credit account.
  • Normally available up to 75% LVR.  Orbit facilities above 75% LVR are considered case-by-case.
  • Interest is calculated daily and paid monthly at ASB's standard variable home loan interest rate. 
  • Orbit account fee is currently $12.00 per month.
  • See ASB's fees and charges. 

 

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ASB Orbit FastTrack (Reducing Revolving Credit)

An Orbit FastTrack has similar features to Orbit, but the credit limit will reduce over time. Orbit FastTrack still gives you the flexibility to redraw up to your reducing limit, but ensures that your loan is repaid by the end of its loan term.

 

How Orbit FastTrack works

Orbit FastTrack is ASB's reducing revolving credit account.

Orbit FastTrack has a reducing loan limit which will amortise (reduce) in the same way a normal table loan is repaid.  Interest is charged on the daily outstanding balance.

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

 

Orbit FastTrack revolving credit is best suited to

  • Ideal if you want to repay your loan faster and keep tighter control over your finances.  
  • Useful if you think you may want to redraw up to your reduced limit occasionally.

  • 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 ASB Orbit FastTrack

  • The facility limit reduces over time.
  • Minimum Orbit facility is $10,000.  
  • Orbit combines your cheque, savings and home loan accounts into a single easy to manage package. 
  • Maximum LVR value of 80%.
  • Interest is calculated daily and paid monthly at ASB's standard variable home loan interest rate. 
  • Orbit account fee is currently $12.00 per month.
  • See ASB's fees and charges.

 

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