WHICH IS FOR ME? HOME LOANS MADE EASY

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1 WHICH IS FOR ME? HOME LOANS MADE EASY

2 About this booklet At ING DIRECT, we try to make finding the right home loan as easy as possible. That s what this booklet is all about. All our home loans are described in plain English and there s a handy summary chart at the back. A simple matter of choice Finding the right home loan is more straight forward than you might think. It s just a matter of choosing a home loan that works with your lifestyle and financial goals. And because ING DIRECT offers a wide range of home loans, with features and benefits that meet your individual needs, it should be easy to find the right one for you. The choice is yours Whether you re buying a home or investment property, refinancing an existing loan or constructing a home, we offer a variety of home loans to meet your needs. We can even combine two or more loans to give you additional features and flexibility. The ING DIRECT advantage ING DIRECT is part of ING Group, one of the world s largest banking and financial services groups. The ING Group offers banking, insurance and asset management to more than 85 million clients in over 40 countries. In Australia, ING DIRECT specialises in the distribution of home loans directly to customers and via mortgage brokers. 1

3 Where to start? To help you identify a home loan that suits you, use the checklist below and consider what you need most from your home loan. Remember, you can usually combine two or more home loan products if this suits your needs. Objective Pay off your home loan as quickly as possible Suggested home loan(s) Orange Advantage, Mortgage Simplifier, Smart Home Loan Protect yourself from interest rate rises Fixed Rate Loan Finance the construction of a property or to purchase land Construction Loan Consolidate your mortgage and other debts into one loan Orange Advantage, Mortgage Simplifier, Smart Home Loan Pay a variable interest rate Orange Advantage, Mortgage Simplifier, Smart Home Loan, Action Equity Loan, Construction Loan Convenient banking with access to a Visa Credit or Debit Card Smart Home Loan, Orange Advantage Access to funds for wealth creation and lifestyle improvements Action Equity Loan, Smart Home Loan Revolving line of credit Action Equity Loan, Smart Home Loan Flexible repayment and redraw facilities Orange Advantage, Mortgage Simplifier, Smart Home Loan, Action Equity Loan Read on for a detailed description of these home loans. You ll also find a summary of our home loans and a Summary Comparison Chart at the back of this booklet. 2

4 Variable Rate Home Loans Orange Advantage Mortgage Simplifier Construction Loan Smart Home Loan Action Equity Loan 3

5 Orange Advantage Orange Advantage is a variable rate home loan linked to a 100% interest offset account. Its main purpose is to reduce the interest charged, helping you save money and pay off your home loan sooner! How it works With Orange Advantage, you re able to have your income deposited into the offset account. The interest on your home loan is calculated daily on the total loan amount outstanding less the funds in your offset account. So the more you have in your offset account the less interest you are charged on your home loan. A detailed online statement will be available to you each quarter for your offset account and a paper statement will be provided to you twice a year for your loan account, detailing just how much interest you have saved. Interest rate discount If your combined residential borrowings with us are $250,000 or more, you will automatically receive an interest rate discount on the Orange Advantage for the life of the loan! Flexible features Orange Advantage provides you with a low variable interest rate which can be offset with funds held in your linked offset transaction account, Orange Everyday. You have the option of making Interest Only repayments (monthly) or Principal and Interest repayments (either monthly or fortnightly). Additional payments can be made to your Orange Advantage any time, as often as you like, with a free redraw facility. Orange Everyday offers you Access to your account via online and phone banking 24 hours a day, 7 days a week Instant access to your money using your Visa Debit Card No monthly account keeping fee Free unlimited ING DIRECT online transactions such as BPAY and Pay Anyone Reimbursement of the ATM owner fee when using any ATM in Australia to withdraw any amount or request a balance enquiry, when you have both an ING DIRECT home loan and Orange Everyday 4

6 Mortgage Simplifier If you want a low variable interest rate as well as a range of flexible features with no ongoing fees, this may be the home loan for you. Flexible features Unlike many home loans, Mortgage Simplifier provides you with both a low variable interest rate and a range of flexible features with no ongoing monthly, annual or redraw fees. You have the option of making Interest Only repayments (monthly) or Principal and Interest repayments (either monthly or fortnightly). Additional payments can be made any time, as often as you like with no additional cost. The flexible redraw facility gives you access to your additional payments when you need them. There is no minimum redraw amount, no limit on how many redraw transactions you can make and no redraw fee. If you move, and your new property offers at least the same level of security as your current property, you won t have to refinance as your Mortgage Simplifier is portable. Accessing your Mortgage Simplifier account is easy. You can make transactions and check the balance of your home loan via online and phone banking 24 hours a day, 7 days a week. You can also make electronic bill payments with BPAY or Pay Anyone from your Mortgage Simplifier. Your transactions are recorded in a detailed statement that will be provided to you every six months. SmartPack discount If your combined residential borrowings with us are $250,000 or more, you will, for a fee, receive an interest rate discount for the life of the Mortgage Simplifier. 5

7 Construction Loan The ideal loan when you re planning to build a property, or purchase land with the intention to build a property within 12 months. It s a variable interest rate loan, designed to help you through the first year of construction. Flexible features You can use your Construction Loan to fund the purchase of land, and the construction of your owner occupied or investment property. If you are using some or all of your loan for construction purposes, the total amount will not be credited to you up front. Instead, the money will be made available via progressive payments, paid directly to the builder. Drawing down the loan with progressive payments reduces the interest payable during the construction period, as repayments are Interest Only and apply only to the funds drawn down. Interest Only repayments must be made monthly. Once construction is completed, or two years after the loan s settlement date (whichever occurs first), unless you choose another home loan product, the loan will automatically convert to our Mortgage Simplifier. 6

8 Smart Home Loan This loan is a line of credit that lets you consolidate all your debts into one easy-to-manage loan. How it works Your salary and other income, such as dividends, tax refunds or rental income can be credited directly to your Smart Home Loan, to help minimise the interest charged. SmartPack discount If your combined residential borrowings with us are $250,000 or more, you will, for a fee, receive an interest rate discount for the life of the Smart Home Loan. Nil interest Visa account The Smart Home Loan comes with a nil interest Visa account. Up to 3% of your total approved loan, to a maximum of $10,000, is allocated to your Visa account. Access cash via: Your Visa Credit Card using the EFTPOS cash out facility Any ATM overseas that carries the Visa logo (you must use the Credit option). Reimbursement of the ATM owner fee when using any ATM in Australia to withdraw any amount or request balance enquiry Access your line of credit via: Your Visa Credit Card using the EFTPOS cash out facility Any ATM within Australia that carries the Cashcard logo Your personalised cheque book Transferring funds via online or phone banking to a nominated bank account, using BPAY or Pay Anyone. Flexible features The Smart Home Loan is available for owner occupied and investment properties and is portable. Repayments are Interest Only and you only pay for what you use, or choose not to make any repayments and let your interest capitalise. When you reach 100% of your loan limit, monthly interest repayments are required. You can make principal or additional payments at any time. On the first day of each month your nil interest Visa account balance will be swept to the Smart Home Loan account. 7

9 Action Equity Loan The Action Equity Loan is a line of credit that you can use for any legal purpose. Use it to invest in another property, buy shares, take that holiday you ve been putting off or simply do something you ve always wanted to do! And if you borrow for income-producing investments, such as shares or an investment property, the interest you pay on the funds borrowed may be tax deductible. Ask your accountant or financial adviser about how to split your accounts to best meet your individual needs. Flexible features Action Equity Loan repayments are Interest Only and you only pay for what you use. You can choose not to make any repayments and let your interest capitalise. Only when you reach 100% of your loan limit are interest repayments required. You can make principal or additional payments at any time. It s easy to access your money using your personalised cheque book. You can also credit money into the bank account(s) you have nominated by using online and phone banking and make electronic bill payments with BPAY or Pay Anyone. For loans in more than one name, each borrower is issued with their own personalised cheque book. 8

10 9 Fixed Rate Loan

11 Fixed Rate Loan Enjoy the certainty of knowing exactly what your repayments will be for a set period and protect yourself from interest rate rises. Our Fixed Rate Loan provides you with the option to fix your interest rate for a period of one to five years. Flexible features Choose between Interest Only repayments (monthly) or Principal and Interest repayments (either monthly or fortnightly). You can also make additional payments of less than $10,000 per anniversary year*, with no additional costs. However, redraw is not available during the fixed interest rate period. This home loan is available for owner occupied and investment properties and is portable if you want to move properties before the fixed term is over. With the Fixed Rate Loan there are no ongoing monthly or annual fees. At the end of your fixed term you can choose to fix your loan for another term, select a different product or your loan will automatically convert to our Mortgage Simplifier. Please note: Break costs may be payable if at anytime before the fixed term expires, you pay out your loan or you make additional payments of $10,000 or more in an anniversary year*, or you ask us to change your loan type or fixed interest period. Break costs may be substantial, in some circumstances tens of thousands of dollars. * Per anniversary year is defined as from anniversary date of settlement to the day before the following anniversary date. 10

12 Home Loans Summary Orange Advantage Mortgage Simplifier Fixed Rate Loan Smart Home Loan A flexible, variable rate home loan that offers you the additional benefit of a 100% interest offset account. A low variable interest rate home loan with no ongoing fees or monthly charges that also offers a variety of flexible features, including a free redraw facility. Provides you with the certainty of knowing what your repayments will be for a fixed period, while having the option to make additional payments of less than $10,000 per anniversary year, without an additional cost. A line of credit with a Visa Credit Card that lets you consolidate your debts, helping you minimise interest charged and bank fees. Action Equity Loan A line of credit loan that frees up the equity you have in your property into a line of credit that you can use for any legal purpose. Construction Loan A loan that finances the purchase of land or the construction of your home or investment property. Split your loan as you see fit You can use your loan for more than one purpose, by splitting the funds into separate accounts. For example, one account could be used to cover your current home loan, the other for your investment activities. Splitting accounts helps provide you with greater flexibility when managing your taxes and expenses. 11

13 Home Loans Glossary Additional payments Extra payments made on your home loan account that reduce the interest payable on the loan over time. Draw down This usually refers to progress payments on a Construction Loan, or to lines of credit where the borrower has access to available funds when they need them. Equity The value of a property minus the owner s outstanding loan balance. Establishment fees Fees charged by the lender for setting up a loan. Fixed rate An interest rate that does not change, regardless of any variations in market interest rates during the fixed term. SmartPack discount If your combined residential borrowings with ING DIRECT are $250,000 or more you will, for a fee, be eligible for a discount on your Mortgage Simplifier and Smart Home Loan interest rates. Interest Only repayments A repayment option in which only the interest accrued on the home loan is paid. This normally converts to Principal and Interest repayments at the end of the Interest Only term. Investment property A property that the owner does not live in. A property purchased for earning a return on the investment. Lenders Mortgage Insurance Lenders Mortgage Insurance protects ING DIRECT in the event that a borrower defaults on a loan. It is important to note that Lenders Mortgage Insurance is not Mortgage Protection Insurance. Mortgage Protection Insurance protects a borrower in the event that they are unable to work due to illness or injury, or if the borrower cannot meet the agreed loan commitment. Line of credit loan A home loan that gives the borrower credit by using the property as collateral. It s a revolving line of credit, lending a specified amount and allowing that amount to be borrowed again once it has been paid. Owner occupied property A property purchased in which the owner lives. PAYG (Pay As You Go) The system by which regular payments are made by an individual to the Tax Office to meet income tax and other liabilities. Portable loan A loan that enables the borrower to move properties without having to refinance, saving on establishment fees (subject to credit approval). Principal and Interest repayments A repayment option in which both the amount borrowed and the interest accrued on that amount are repaid over an agreed term. Redraw facility A facility that allows additional payments made on a loan to be accessed, or drawn on by the borrower. Refinance To pay off what you currently owe on your loan with a new loan. Variable rate An interest rate that may rise and fall as market conditions change. Reduced Equity Fee Reduced Equity Fee is payable on selected loan products when your Loan to Value Ratio (LVR) exceeds the LVR level set out in ING DIRECT's standard credit policy. The Reduced Equity Fee is non refundable and does not protect you as the borrower; you will still be responsible for repaying all amounts owed to ING DIRECT. 12

14 Summary Comparison Chart Orange Advantage Mortgage Simplifier Owner Occupied or Investment Yes Yes Monthly or fortnightly repayments Yes Yes Interest Only repayments* Yes Yes Repayments Direct Debit Salary Credit Direct Debit Salary Credit Additional payments Yes Yes Redraw Facility Yes Yes Offset facility Through your Orange Everyday No Online and Phone Banking access # Yes Yes Bpay Yes Yes Pay Anyone Yes Yes ATM/EFTPOS access Through your Orange Everyday No Cheque Book access No No Annual Fee Yes No Combine with other ING DIRECT Loans Yes Yes Portable Loan Yes Yes Total Loan Term Up to 30 years Up to 30 years * Interest Only repayments can only be made monthly, maximum term is 5 years ^ If you select a fixed rate loan, break costs may be payable if at anytime before the fixed term expires, you pay out your loan or you make additional payments of $10,000 or more in an anniversary year, or you ask us to change your loan type or fixed interest period. Break costs may be substantial, in some circumstances tens of thousands of dollars. Any additional payments or advanced funds are not available for redraw during the fixed term. # Conditions and restrictions apply to online and phone banking access. BPAY is a registered trademark of BPAY Pty Ltd ABN All applications for credit are subject to ING DIRECT s credit approval criteria. Information is current as at the issue date and is subject to change without notice. 13

15 Fixed Rate 1-5 Years Smart Home Loan Action Equity Loan Construction Loan Yes Yes Yes Yes Yes Yes Yes Monthly Yes Yes Yes Yes Direct Debit Less than $10,000 per yearˆ Direct Debit Salary Credit Direct Debit Salary Credit Direct Debit Yes Yes No No Yes Yes No No No No No Yes Yes Yes Yes No Yes Yes No No Yes Yes No No Through your Visa Credit Card No No No Yes Yes No No Yes No No Yes Yes Yes No Yes Yes Yes No Up to 30 years N/A N/A Up to 30 years For more information on any ING DIRECT home loan featured in this booklet, including full details of relevant terms and conditions, please call our Contact Centre on , available 24 hours a day, 7 days a week. 14

16 HOW DO I contac ING DIRECT? Call Visit ingdirect.com.au Visit our website at ingdirect.com.au GPO Box 4094 Sydney NSW 2001 Telephone ING DIRECT is a division of ING Bank (Australia) Limited ABN ING DIRECT is a registered trademark of ING Groep N.V. Bpay is a registered trademark of Bpay Pty Ltd. ABN Information in this brochure is current as at the time of printing and is subject to change. All applications for credit are subject to ING DIRECT s credit approval criteria. Fees and charges apply. Any advice provided in this brochure does not take into account your objectives, financial situation or needs and you should consider whether it is appropriate for you. Before making any decision in relation to an ING DIRECT product you should read the relevant Terms and Conditions booklet and Fees and Charges brochure available at ingdirect.com.au or on request by calling Products are issued by ING DIRECT, a division of ING Bank (Australia) Limited ABN , AFSL/ACL ING DIRECT's colour orange is a trademark of ING DIRECT and the ING Group of companies. INGD IM007 07/12