Shaping your loan payments

How you choose to shape your home loan payments can make a difference to how much it will cost you. You can make some of these changes within ASB Home Central which puts the control of your loan in your hands.


Understanding the basics

When you take out a home loan the money you borrow (the loan balance) is called the principal and what you are charged to borrow that money is called interest. The time over which you choose to repay the loan is the loan term.

At the end of the loan term you need to have repaid the principal and interest. That amount will depend on a number of things including your interest rate, loan term and type, and the frequency and type of payments.

See which loan might work best for you.


Where does your payment go

Unless you are making an interest-only payment, one part of your payment covers your interest and the other part repays your principal, which reduces your loan balance. How those payments are split depends on the type of loan you have.

The more you reduce your loan balance, the less total interest you get charged, so how you choose to shape your payments and how much goes towards the principal is an important decision.



Choosing a loan type

There are different ways you can choose to repay your home loan. With a term loan you make regular payments over the loan term. A revolving credit home loan is more like an overdraft.

How you choose to shape your payments or credit limit can help you save money by reducing the interest you are charged. See how small changes to your repayments could impact your home loan with ASB Home Central.


Term loan options

Table loan

  • Fixed or Variable interest rate.
  • Fortnightly or monthly payments.
  • Loan terms of 6 months up to 30 years.

Table loans can make budgeting easier as your payments are spread out evenly over the full term of your loan. However if you are on a variable interest rate, that rate may go up or down, which will affect your payment amount. If you are on a fixed rate, your payments will remain the same during the fixed rate period.

Part of every payment you make will go towards interest and the other part towards principal. At the start of your loan you’ll pay mostly interest and a little principal, and with each payment you’ll pay less interest and more principal than the previous one.

Reducing loan

  • Fixed or Variable interest rate.
  • Fortnightly or monthly payments
  • Loan terms of 6 months up to 30 years.

If you want your regular payment amounts to reduce over time, consider a reducing loan. The principal portion of your regular payment remains the same throughout the term of your loan while the interest portion will reduce. This means your regular repayment amount will be higher to begin with, but will steadily decrease over time.

Interest-only payments

Interest-only payments mean each of your payments will only cover the interest costs calculated on your outstanding principal balance.

Interest-only fixed or floating home loans are subject to meeting specific lending criteria and terms. Please get in touch with us if you are interested in this option.

Revolving credit loan options

Orbit Home Loan - fixed credit limit

  • Variable (floating) interest rate only.
  • Interest charged monthly.
  • No set loan term.

An ASB Orbit home loan is like an overdraft on a transaction account with the flexibility to repay your principal at your own pace. You have a set credit limit up to which you can redraw available funds. Interest on your loan balance is calculated and accrued daily and charged monthly. If you aren't confident in budgeting or actively managing your finances this loan is not suitable for you.

Orbit FastTrack home loan - reducing credit loan

  • Variable (floating) interest rate only
  • Interest charged fortnightly or monthly
  • Loan terms from 6 months up to 30 years

This is similar to the Orbit Home Loan; except the maximum amount you can redraw reduces regularly.

With Orbit FastTrack, your maximum credit limit decreases fortnightly or monthly and your interest is charged on the same day. You can redraw available funds up to your credit limit at any time. However, if you want to increase your limit back to the original amount you'll need to re-apply to do this. 

Take control of your home loan with ASB Home Central

Did you know that you can manage and view your home loan anytime, anywhere? Make changes to your home loan, view the estimated value of your property and much more. Take a look today and take control of your loan.

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Start your home loan application online. We'll be in touch to complete the next steps with you.

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Meet in person

One of our team can meet at a time and place that suits you, or you can make an appointment to meet at an ASB branch.

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Give us a call

You can pick up the phone and call one of our home lending team, weekdays 8:00am-6:30pm and on Saturday 8:30am-5:00pm.

0800 100 600

+64 9 306 3000 for overseas

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Existing customers can view and manage loans, apply for a top up and more.

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ASB's lending criteria, terms and fees apply. Loan processing fee of up to $400 may apply and a low equity margin may apply. Orbit home loans are not available for business purposes. Orbit Home Loans are subject to specific lending criteria and are periodically reviewed by ASB.

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