ING Direct Mortgages...Where's the catch?

elDeeJay

Im looking around at fixed rate mortgage products atm with a view to buying my first house with my Girlfriend in the coming month(s). We have found a house we like and need £130k (81% LTV) and looking at the various products on offer I see ING Direct are doing a 2Yr fixed rate which seems to compare rather favourably with the competition.

They are offering 4.95% fixed for 2 years, whereafter the rate reverts to 5.14%, giving an overall cost (for comparison) of 5.3%. This seems miles cheaper than the likes of A&L, who on the moneysupermarket top fixed rate products work out way more expensive p/m and overall come out >7%.

I’m therefore wondering what exactly I’m missing and why this is so “cheap”? Are there any hidden catches in the ING product or are there any better comparative deals available about now………….

Thanks

Ian_W

I don't think there can be catches as they have to disclose all T&Cs to you. I think they are doing what they did with their Savings account which was buy market share with a really good rate but once they got enough savers in let it drift off the pace and rely on inertia to keep punters from moving. Their savings account is about 3/4% off the best buys now.

I'd fill yer booits for now - but be prepared to move if they become uncompetitive a few years down the line.

elDeeJay

Thanks. Im just suspicious as to why ING work out about £100 pcm cheaper than the highly-ranked A&L on MoneySupermarket, yet ING aren't even mentioned in their top fixed rate products when they are significantly better than most, if not all, of their suggestions.

Is there a reason why?

HelpWhereIcan

For some reason Moneysupermarket does not seem to include ING direct when I have done a quick search either and I can only cynically assume that it is because their products are not available through brokers and Moneysupermarket is a big supplier of leads to brokers.

You also have to bear in mind that there may be some aspect of their criteria that you do not fulfill and that may be reflected in Moneysupermarket's results.

I always thought that Moneyfacts search http://www.moneyfacts.co.uk/searches/default.aspx was better anyway and definately includes all the lenders not available by going through a broker - including ING direct.

UK007BullDog

Please remember that ALL comparison sites are biased in some way and will not show all lenders. So you would need to visit a number of them to get a good idea.

Also some lenders only work direct, so they will not show up on comparison sites or with brokers.

As for the ING deal make sure it is for First Time Buyers like yourself and not a remortgage deal (not for FTB), as I suspect that it might be.

Also make sure that they will accept your property type before applying.

elDeeJay

Thanks guys, its definitely a FTB product and AFAIK the only downside is they dont accept over-payments on their Fixed rate products. Other than that I cannot see any drawbacks to the product.

juliette32

I have just taken out a mortgage with ING and you can overpay by about 10% of your mortgage each year in the first 2 years, but it needs to be in lump sums of minimum 1000.

elDeeJay

juliette32 wrote:

I have just taken out a mortgage with ING and you can overpay by about 10% of your mortgage each year in the first 2 years, but it needs to be in lump sums of minimum 1000.

Thanks, thats good news. I thought i read on the website that they do not accept overpaymens on their fixed rate products. Was yours a fixed rate?

Im guessing you had a good look around before opting with ING direct? nothing I have seen comes close to what they are offering at the moment!

if i apply and get accepted, how long does the offer last for?

Thanks again folks!

juliette32

It should last for 24 months. They are quite quick in responding as well. Yes I took the fixed rate but haven't completed yet as my current fixed rate has another 2 months to go.
In the KFI document I received was clearly specified that within the first 2 years you are allowed overpayments but up to a certain limit. I was interested as well so I asked them and they confirmed.
Good luck!

tomstickland

I reckon you could do better than 4.95%.
If you plan on changing your mortgage whenever the discounted rate ends then the "overall cost for comparison" figure is of no use anyway.

jamesd

If there's a catch I couldn't find it and I'm considering them myself. Still worth asking a broker to see if they can come up with something better.