ING Direct Home Loans

Australia's fifth largest lender

Everyone can tell you who Australia's big four banks are, but who is the fifth biggest commercial lender in Australia? You may be surprised to hear that its ING Direct. They hold $38 billion in mortgages, $26 billion in deposits and provide a quality banking service to over 1.4 million Australian customers every year.

Due to the sheer size of this institution, you can expect an extensive mix financial products, and that's exactly what ING Direct provide. Since 1999, ING Direct has been offering Australians an excellent selection of home loans, transactions and savings accounts, superannuation options and business products - all of this offered by electronic means to the consumer.

ING Direct is an online lender: they dont have physical branches like traditional lenders do. The lack of branches means ING Direct can deliver low rates to their customers. Furthermore, the application process is simple. All it takes is the click of a mouse to get in touch with a mortgage specialist, who are available six days a week to handle your queries and requests. Alternatively, you can pick up the phone and speak to a consultant to arrange an appointment.

Awards and achievements

ING Direct has received numerous awards since its introduction to the banking market in 1999. ING has been recognised for its excellence in the fields of customer satisfaction, value for money and outstanding reputation.

• Won 'Money Magazines 'Cheapest Home Loan for the SmartPack Mortgage Simplifier in 2012 and 2011
• Was found to be the eighth most reputable organisation out of Australia's 60 biggest brands in 2012
• Awarded 'Financial Institution of the year - Non Big Four at the Australian Banking and Finance Awards in 2011
• Won 'Direct Institution of the Year at the Financial Review Smart Investor Blue Ribbon Awards in 2011, as well as 'Best Transaction Account for the Orange Everyday account
• Won a gold medal for 'Best Basic Variable Home Loan at the Your Mortgage of the Year Awards in 2011.

Things to consider about this provider

ING Direct has a range of products that are aimed towards all segments of the market. Whatever your goals as a potential borrower, ING has a loan to suit your needs. They offer loans for first home buyers, investors, those looking to refinance, and borrowers who want to consolidate their debts. In addition to this, they have most of the loan features youd expect from a world class lender, including:

Maximum LVR: The loan-to-value ratio (LVR) refers to the percentage of the value of the property you want to borrow. ING Direct will lend you up to 95% of the value of the property you wish to buy with the Orange Advantage loan. For the remaining products theres a maximum LVR of 80%.

100% Offset accounts: This is a transaction account linked to your home loan. The funds you have in your offset account are deducted from the principle of the loan. Interest is calculated on the reduced principal loan size.

Interest only options: Interest only loans are great if you are an investor or building a home. Paying only the interest portion of your loan brings the cost down during the crucial construction phase, or if you plan to buy an investment property and sell it soon after.

Split loans: Some ING Direct loans allow you to split the loan into portions, securing parts of your loan against a fixed or variable rates of interest. When you split your loan, the fixed rate portion will protect you in times when interest rates rise, and the variable rate portion will mean you get the most out of rate cuts.

Unlimited free redraws: You can make additional repayments on some ING Direct loans. If you happen to need some of these extra repayments, you can access them again through the online platform or via the telephone banking system.

Interest rate discounts: Some ING Direct loans offer discounts off the interest rate of the loan if certain conditions are met - including borrowing over a certain amount and having a certain loan-to-value ratio (LVR). These are explained below.

Comparing ING Direct home loans

ING Direct offers six different loans which suit different purposes. Each comes with different features and benefits:

Orange Advantage Home Loan

The Orange Advantage Home Loan from ING Direct is a full featured home loan that offers plenty of flexibility along with a low interest rate. Its suited to people looking to buying a home or refinance their existing loan. This loan is not available to people renovating or building a new home.

Successful applicants are also able to take advantage of linking a 100% offset account to the Orange Advantage Home Loan mortgage via the Orange Everyday account. This is exactly the same as a regular transaction account so you can do all the things you would usually do with a normal savings account: directly deposit your salary, pay bills and expenses via direct debit and use the account to manage your mortgage. The difference is that every dollar within your offset account reduces how much interest you pay on your mortgage.

Repayments can be made fortnightly or monthly if you choose to pay both the principal and interest of the loan. If you opt for interest only payments, you are limited to monthly repayments only.

The applicable rate on this loan is already competitive, however, ING Direct will provide further discounts based on the amount you wish to borrow in relation to the value of the property. If you can keep your loan-to-value ratio below 80%, you may be up for a further discount - saving you thousands over the life of your loan.

Construction Loan

If you are a first home buyer or investor keen to build a new home or renovate, youll need a construction loan to get the job done. The ING Direct Construction Loan features a low interest rate that helps to keep your costs down during the construction process.

ING Direct will make progress payments to your licensed builder as your construction project progresses. During the construction process, you are only required to make interest only payments on the amounts that have been drawn. Your construction loan will revert to a ING Direct Mortgage Simplifier Home Loan after completion of the construction, or after two years.This means you have a low rate home loan with additional features such as a redraw facility and the ability to make additional repayments. A final valuation fee will apply for construction loans.

Fixed Rate Home Loan

Fixed rate loans are ideal for any borrower wanting to avoid an increase in lending rates. During the fixed term, youll have the certainty of being able to plan your mortgage budget down to the cent.

Although the rate is fixed, the repayment options are anything but rigid. You are able to make extra repayments on your home loan while its fixed, but they mustn't exceed $10,000 per year. Keep in mind that the redraw facility on your home loan wont be available until after the fixed term ends. There is also an interest only option on ING Directs fixed home loans.

If you dont wish to lock in your entire mortgage, you can choose to split your loan. This lets you lock in a portion of your mortgage and take advantage of stable repayments over the fixed term. At the same time, the variable portion lets you take advantage of the features that are available to variable rate loans only. By splitting your loan you get to hedge your bets against negative rate movements while also taking advantage of the variable rate loan features. A split fee may apply.

Remember that break fees may apply if you repay your mortgage before the fixed term has ended. This usually occurs when you sell your home or refinance over to a different lender. You can avoid paying break fees by considering a shorter fixed term if you already know you intend to sell your home. You may also want to consider waiting until your fixed rate has ended before you refinance.

Action Equity Loan

The ING Direct Action Equity Loan is a highly flexible line of credit account which allows you to use your home as a security to borrow for whatever reason you like. Its suited to anyone who has built up equity in their home and wants to be able to use it, either for a holiday, to buy a car, to go overseas, or to invest their money in a new venture. You are able to deposit your salary into the account and use those funds the same way you would with a regular transaction account.

You can repay as much as you like, and redraw your funds as you need them up to your approved credit limit. Interest on an Action Equity Loan is only ever charged on the amount youve drawn.

If you dont like the idea of having your entire mortgage set on a line of credit account, you can opt to split your loan. This is a great option for investors, as choosing one split as a line of credit for business or investment purposes makes reporting easier at tax time. It also helps to keep personal and investment expenses and income separated. A split fee will apply.

Smart Home Loan

The ING Smart Home Loan combines your credit card and other personal loan debts into one line of credit loan. Its ideal for anyone who wants to reduce fees and interest charges because it rolls all your debts into one account.

ING Direct also offer discounts of 0.50% p.a if you borrow over $250,000. In addition to reduced fees and charges, this discounted interest rate presents borrowers with the opportunity to save big.

You can also make additional repayments on the loan whenever you like, and pay off the loan in as little or as longer time as you would like.

Finally, the Smart Home Loan also comes with a VISA card that you can use for everyday purchases.

Mortgage Simplifier

The Mortgage Simplifier Home Loan is a basic variable home loan with a low interest rate and no monthly account fees. The main feature of this loan is the discounted rate, and if you are borrowing more than $250,000, youll receive an additional 0.06% discount.

This loan is ideal for personal borrowers who dont want all the fancy bells-and-whistles some home loans offer. Its a simple loan that lets you focus on paying off your mortgage as quickly as possible.

As attractive as the low rate is for first home buyers, interest only payments are great feature for investors. The interest only period extends for five years before automatically reverting back to principal and interest. Payments can be organised so theyre made fortnightly or monthly for the principal and interest option. If you choose the interest only option, you must make your repayments on a month by month basis.

There is a redraw facility available with this mortgage so you are able to withdraw any additional payments youve made. There is no fee charged for using the redraw facility using the online banking platform.

What do I do if Im interested in a product?

If you are interested in a particular product from ING Direct, check out the products review page to find out more.

ING Direct home loans are offered through Aussie Mortgage Brokers, so if you feel that one of their products will fulfill your needs, click enquire to make a free appointment with Aussie. This will take you to the Aussie Mortgage Brokers website, where you'll be able to enter in your contact details and book a time to discuss the product you're interested in.