double post

This post has been edited by overruled23: Jul 19 2014, 06:25 PM

hi all,

tried to search through the term flexi-loan but unable to find a good answer. basically i have a difficulty in understanding this term even after a few readings.

i am currently applying for a home loan and have a few offers at hand but all are under "semi-flexi".

what i understand from this "semi-flexi" term is that i can reduce interest payment by depositing extra money into the loan account. but for every withdrawal i am to pay a fixed fee.

my problem is this: will it be more beneficial for me to dump money into the loan account or asb account?

Lets say
Loan amount: 500k for 30 years
Loan interest: 4.4%
ASB: 8%/year
And I have 50k of cash at hand

If i dump the cash into loan account, my interest rate will be calculated at 450k but i will not be given any dividend, afaik.

Will it be more beneficial for me to dump into my ASB with a 8% dicidend payout and once I have enough money, I will pay the home loan lump sum bit by bit.

For long term, which is better? Hope all in the know can help to make things clearer. Thanking in advance.