Ing Direct Mortgage. What's the catch?

jeetster

I'm looking at remortgaging soon as my fixed rate is coming to an end soon.(great timing hey!!!).

I've seen that Ing Direct has one mortgage product which is at 5.14%, which seems at least 0.50% below most fixes (when you take into account the fees), and better than most discounted rates.

What's the catch here? How do they make money when the boe rate is 5.25%?

epz_2

cant seem to find a fixed rate on their site but the do have a 5.14 variable rate which im tempted by, granted its more risk but we are close to the top of the interest rates with about another .5% at most to go so if i calculate what i can afford then that should be ok.

as i understand it the reason the ing rate is below the boe base rate is because of some sort of currancy trading deals the banks are doing.

simple_saver

couple of threads further down
my personal experience was that the customer service was one of the worst i have used
real shame as the flexibility of the product seemed excellent

MarkyMarkD

The ING rate is simply a loss leader, like their savings rates were when they introduced them. There is no way that the rate is sustainable - NO UK lender can lend at below BoE base rate in the long term.

The catch, therefore, is that the guaranteed maximum rate on this product is around 1% higher than the current rate, and that ING are probably going to increase their rate towards this guaranteed rate at some point in time.

If you are happy to switch to ING, and then switch away again as soon as it becomes uncompetitive, then it would be foolish not to do so - it's a bit of hassle, but it's a good rate.

But to buy it in the belief that it'll be a sustainably competitive (i.e. sustainably loss-making for ING) rate would be misguided IMHO.

Poundcounter

Agree with post above. ING specifically set the upper limit on their rate to be 0.9% above base rate, so up to 6.15% at current base rate. I hoping they won't go there in one leap, but rather edge it up until they start hemorrhaging borrowers. I can also confirm that their customer service is poor. Don't rely on anything your told over the phone. Double or triple check if it's important.