ING Direct mortgage

Jeannine

I, too, found it really difficult to get my head around it. I make an overpayment every month and once this overpayment reserve has built up to a nice round number, I phone them up and ask them to make a capital payment (I think that's what they call it). This then reduces my monthly payment and the overpayment reserve is back to zero. However, I then make bigger overpayments every month. So it's the same as if I just let the reserve build up I suppose....:rolleyes:

mr_jetlag

beartie wrote: »

Hi
I currently have an overpayment reserve equivalent to about 3 months payments. This fund reduces interest on the mortgage only. it does not reduce the capital or the term according to ing. So what happens to the reserve/ my mortgage when e my mortgage is paid off??

Is this overpayment really only suitable for building in payment hoilidays ( of which I think you can only take 3 in a year)??

Someone help me get my head round it please!!

Say you have a monthly mortgage payment of £500, and a reserve of £1500. The overpayment can be used in 1 of 2 ways:

1. Take a payment holiday / reduced payment up to the value of your reserve. This means you can opt not to pay for 3 months, or pay £250 for 6 months, on your mortgage.

2. Apply a capital repayment on your mortgage at any time. If your remaining mortgage balance is £100,000 you can ring up ING and reduce this to £98,500 and they will draw up a new monthly payment for you.

In either case, the reserve DOES affect the daily interest calculation which ING applies to your mortgage, so if you leave your reserve there your interest payments are reduced slightly (I was told this is very much like how an "offset" account would work).

beartie

Thanks for the advice guys, I will make a capital repayment then soon .I presume there is no fee for the readjustment:T

mr_jetlag

Has anyone received their letter reducing February's payment yet? Normally this should be on the website by now, but it's still showing 2.89% for me...

belge75

mr_jetlag wrote: »

Has anyone received their letter reducing February's payment yet? Normally this should be on the website by now, but it's still showing 2.89% for me...

Judging by people's past experiences I'd expect the letters should be out this week/early next week and the rate on the site will change on 1st Feb, when the rate reduction actually takes affect.

MoneySavingNovice

belge75 wrote: »

Judging by people's past experiences I'd expect the letters should be out this week/early next week and the rate on the site will change on 1st Feb, when the rate reduction actually takes affect.

One thing that ING have done in the past is to leave the rate unchanged on the site until the 1st of the month, but to recalculate the amout due on the next Direct Debit, allowing you to check the interest rate. Normally this is done on the 20th but does not seem to have happened this time.

Jeannine

New lower payment shown for February!!:j

MoneySavingNovice

Jeannine wrote: »

New lower payment shown for February!!:j

Me too.....they are 2 days later than normal!

Joby_2

:beer: mine has come down £20 too - tho they haven't posted the new % rate yet

jeferey

Joby wrote: »

:beer: mine has come down £20 too - tho they haven't posted the new % rate yet

My rate still says 2.89% - my payment hasn't changed - I've left it the same since Sept 2007 when the rate was about 5.99%. I've worked out I should be paid off in 2014 - I've managed to knock 2 years off the term!!