Sorry late reply haha

1. Financing rate is currently at 4.85% p.a., with a 40-year tenure

2. Last year ASB return was 7% p.a.

Since this is a financing (amortization) and an investment (compounding interest), you can't calculate the total returns by simply finding the difference between the two figures. You need to run both accounts (loan and investment) amd compare the results. Check out the examples below.

As per any calculation, we need to make some assumptions. We are assuming that the interest and installment remain throughout the 40-year tenure at 4.85% p.a. and RM945/m; as well as a yearly return of 6.5% p.a., with compounding interest (meaning distribution is allowed to be reinvested into the fund)

a. Loan account, total payment of RM0.453M


b. ASB account, total return of RM2.483M

Not yet, I doubt it is coming anytime soon. They do not know how to do with excess capital since they are too new, at least compared to ASB which already has funds and prior investments due to its age
I know right? Plenty of people have made millions from ASB FInancing schemes. It is open to all races, Bumiputra as well as Non-Bumiputra. But it has a caveat:


By 18 you should ask them if they would like to open their own account, as they should be given the opportunity to invest on their own too. But I have been have young, 19 year olds to open ASB-financing as my clients. Their parents are paying and guaranteeing the financing of course

yes, the NRIC is fine to open the ASB/ASNB accounts, but to apply for a financing, you need more documents than that. I can help with that if you would like to, otherwise, you can always take a trip to the bank. They will require basic financial documents, no different from any other financing
Depends, I don't remember your age because I did not link your name to your lowyat profile. I do remember we met for signing at a mamak near Endah Parade right? Sri Petaling.

Okay, here is the table to get 40-years tenure, it depends on your age. How old are you? if you are below 30 years old, it may be worth refinancing to get the longer tenure, but it is your call, I cannot force you to do one (status quo) or another (refinancing):


Due to the the fact that there is always a margin between the financing rate (4.85%) and the ASB distribution rate (7% last year), it is always much more beneficial to invest through financing. As someone below said, it is "free money".

Consider these calculations, assumption a return of 6.5%, and even if they fluctuate, both investments would be experienced the same amount of fluctuations since they are both invested in the same ASB account:

1) Cash investment, for RM945/m, 40-years, maturity value: RM2.061M



2) ASB Financing investment, for RM945/m, 40-years, maturity value: RM2.483M





That is correct. In a a way it is like any other investments. I will compare it to properties:

1. In properties:

a. You get rental income
b. You get capital appreciation (or if you are unlucky, depreciation)
c. You get a loan, and need to serve the instalments

2. In ASB-Financing:

a. You get distribution income (yearly basis)
b. Your capital is fixed though, the RM200,000 units that yo buy remain that way forever
c. You get a loan, and need to serve the installments

Investment in properties and investment in ASB through financing are similar in that they are both using the asset as collateral to get lower financing/interest rates. With these low rates, there is a margin between the financing rate vs the return rate. We earn a profit by profiting through this margin. 

The risk-levels are vastly different though, since with properties:

a. Capital can appreciate or depreciate
b. Fixed asset, takes time to dispose
c. Fixed asset, costs a lot of money to dispose including agent fees and applicable taxes (RPGT), charge to discharge
d. Require general (fire) insurance
e. Tenant default
f. Damages to the property

The list goes on. So for those who are eligible for ASB and thus ASB Financing, this is a no brainer.

A note here.

1. PNB is the owner of ASNB (the Unit Trust Management Company) that manages the funds that you are familiar with (ASB, ASB2, ASB 3, ASM, AS1M, etc.). PNB are separate entity from ASNB; PNB own multiple ventures/operations that generate profits for the company. PNB may also own shares, and some of these holdings may be the same ones owned by the ASNB funds; and by pooling their holdings together, they own huge chunks in a number of public companies in Malaysia. For example: Sime Darby, Maybank, etc.

2. Let's look at the predicted ASB returns some of us have thrown out. Although it seems that 6.25% + 0.25% and 6.00% +0.50% are the same (6.50%), there are different implications between these returns. ASB returns are quoted in [X + Y] =  Z%

a. X is the fund distribution (sen/unit) set by the fund manager, heavily based on the fund investment performances throughout the fiscal year

b. Y is the bonus (sen/unit) paid by PNB to ASB investors. PNB do this because ASB is their flagship fund and they want ASB returns to look good.

3. Let's look at these two returns:

a. 6.25% + 0.25% = 6.50%
b. 6.00% + 0.50% = 6.50%

In (a) the ASB fund itself performed poorly so PNB had to prop it up by declaring higher than usual bonus, whereas in (b) the ASB fund performed as expected, prompting PNB to pay the usual level of bonus. I much prefer for (b) to happen

yes and not

it will appear in your CCRIS

but the distribution you earned from ASB can be used as part of your income