Topic: ING Direct mortgage & porting using DND clause

[Nix]

Has anyone here used the portability clause with ING? Specifically blend and extend, the clause says they will give you their best rate. I am unclear if this simply means their posted rate or the actual rate others are being offered. I like that they don't use the IRD for breaking a mortgage, and I can get p-.9 via a broker, which puts us at 2.1% for a closed variable 5 yr, and their posted rates are always decent but always you can get a lower rate than the posted one. Just curious if anyone here can give an actual experience with ING so I can get a better idea what will happen when we port over in ~3 years with them.

[Anny]

I'm not sure if you'll get many replies, only because I bet over 90% just sign their mortgage contract without reading it and without knowing what the penalties etc.   Seems the only thing people are about is having the lowest payment possible, some may only be concerned with the lowest rate possible.  I doubt many of us know the penalties of breaking our mortgage for certain.

[CDN Aviator]

I doubt many of us know the penalties of breaking our mortgage for certain.

Well, i have none. I was expecting to be posted within a year or two of buying my place so i took a 100% open mortgage. 2 years later....oh look....posted.

[George Wallace]

.....  I doubt many of us know the penalties of breaking our mortgage for certain.

I agree with CDN Aviator.  If you don't read your mortgage ("contract") then you really deserve to get screwed over.  Like any "contract" you sign, you HAVE TO read the fine print and agree to it.  If you don't, then you have no legal grounds to stand on.  It is no ones fault but your own. 

[CDN Aviator]

i just wanted to show that at least one person knew what their penalties were.

[dapaterson]

A related issue is mortgage insurance.  While banks are eager to sell you that very profitable package, it has exclusions for much of what a military member does.  I found it to be more affordable to declien the bank's insurance and take out SISIP term insurance for the amount of the mortgage - lower payments and no exclusion for military service.

[Anny]

I agree with CDN Aviator.  If you don't read your mortgage ("contract") then you really deserve to get screwed over.  Like any "contract" you sign, you HAVE TO read the fine print and agree to it.  If you don't, then you have no legal grounds to stand on.  It is no ones fault but your own.

George, I agree 100% with what you say, hense my comment about me believing over 90% of people just sign without reading or understanding their mortgage contact.  I was pointing out that Nix wasn't getting many replies because so many don't read their contract, or don't know what their penalties are.

We take our contract home for a min 48 hours and read the whole thing, and if I don't understand a clause I phone my lawyer (my dad!) and make sure I understand before signing off on it.  Not once have I signed off on a mortgage contract without at least one ammendment.

Our mortgage was (we now have no mortgage) 3 month max interest, not the differential... not that in todays market that would matter much because rates are going up, not down so the rate differential won't come into affect any time soon.  The 3 months is reimbursed out of core, so at least we would not have been out of pocket any money if we had to break the mortgage.  We toyed with an open mortgage as well, but the rate was a fair bit higher, and with the only penalty being 3 months which is reimbursed anyway, we stuck with the closed.  Plus we had the option to pay off 25% extra a year plus up our payments by 25%...which is nice when you have tour money you want to put against your mortgage.   Open is nice if you're coming into a bunch of money and want to pay off the mortgage though.  We may consider open again if we don't sell our house right away but still want to buy at our new posting.

dapaterson, do you mind me asking why you have mortgage insurance?

[Anny]

Oh I forgot Nix was asking specifically about ING. Our last mortgage was with them, the customer service was excellent. We've paid our mortgage off so we haven't ported anything with them yet, but I have heard they are very customer orientated.  I wish you the best if you're considering going with them.

[Strike]

I know that with my mortgage (and many that are out there), even though it's portable there will be a penalty to break it even for a short period of time.  The port comes in when I reinstate the mortgage on the new house and the penalty gets reimbursed.

I had issues with Brookfield during my last move because they jumped the gun and paid off part of the penalty (I had a 2 week period without a home) prior to my taking possession and reinstating the mortgage.

[Anny]

I know that with my mortgage (and many that are out there), even though it's portable there will be a penalty to break it even for a short period of time.  The port comes in when I reinstate the mortgage on the new house and the penalty gets reimbursed.

I had issues with Brookfield during my last move because they jumped the gun and paid off part of the penalty (I had a 2 week period without a home) prior to my taking possession and reinstating the mortgage.

Be careful, not all penalties are reimbursed, only three months interest comes out of your core envelope.  I know guys who had to pay as much as $9K out of pocket because of the rate differential.  There was even a canforgen that came out (last year?) about this because it's such a huge issue.

[PuckChaser]

dapaterson, do you mind me asking why you have mortgage insurance?

Probably because he's in an inherently dangerous profession as a CF member and would prefer to leave his house paid off for his spouse if anything happened?

[Anny]

Possibly, but there are other, less expensive, options for that vs mortgage insurance, so this is why I'm asking.

[Occam]

dapaterson, do you mind me asking why you have mortgage insurance?

He didn't say he had mortgage insurance.  Actually, he correctly stated that for the most part, mortgage insurance offered by the banks is mostly useless to CF members because of the plethora of exclusions they have.

What he said was that SISIP is a cheaper alternative to mortgage insurance, and has none of the exclusions which would affect CF members.

[Strike]

Be careful, not all penalties are reimbursed, only three months interest comes out of your core envelope.  I know guys who had to pay as much as $9K out of pocket because of the rate differential.  There was even a canforgen that came out (last year?) about this because it's such a huge issue.

The Bank reimbursed the penalties that they gave me for breaking my mortgage once I started it up again and thus completed the port.  Because of my being able to port the mortgage, Brookfield should have never even gotten involved.

[dapaterson]

He didn't say he had mortgage insurance.  Actually, he correctly stated that for the most part, mortgage insurance offered by the banks is mostly useless to CF members because of the plethora of exclusions they have.

What he said was that SISIP is a cheaper alternative to mortgage insurance, and has none of the exclusions which would affect CF members.

Exactly.  I looked only at catastrophic insurance (ie pay off the mortgage if I were to be killed), and term insurance was the better option by far - lower premiums and the payoff did not go down over time as it does with mortgage insurance.  Other options (like disability insurance, where the payments will be made for you if your income is reduced dur to injury) I discounted.


I do fully agree that you have to read documents fully and ask any questions, and go in to mortgage discussions with backround information.  My first mortgage I was offered 0.5% off the lsited rate by "my" bank - who were dismayed when I countered that another bank (that I didn't name just yet) was offering me a full point off.  "Well, I can speak to my manager"  "Yes, you probably should."  Next time round I moved to another bank, and brought a printout of current rates available across Canada and said "You'll beat the best rate listed here."

Prepayment and payment increase options are a delight; I enjoy watching the principal dropping (and really like getting annual statements that show that I paid more in principal than in interest).  Even better will be getting the mortgage discharge - and finding other uses for the mortgage payments...

[Anny]

Exactly.  I looked only at catastrophic insurance (ie pay off the mortgage if I were to be killed), and term insurance was the better option by far - lower premiums and the payoff did not go down over time as it does with mortgage insurance.  Other options (like disability insurance, where the payments will be made for you if your income is reduced dur to injury) I discounted.

....

Prepayment and payment increase options are a delight; I enjoy watching the principal dropping (and really like getting annual statements that show that I paid more in principal than in interest).  Even better will be getting the mortgage discharge - and finding other uses for the mortgage payments...

Thanks for the answer re: mortgage insurance.  We have also have life insurance via the Personel (via SISIP) which pays off the mortgage and gives dh coverage if he is injured or killed even if it's in war.  It sounds like it's quite similar to the catastrophic insurance you have.  The reasons you list are exactly why I was asking why you had mortgage insurance (I was thinking typical mortgage insurance which I would advise against but each to their own).  Also, something I'm not sure if members are aware of, but most (most, not all) financial institutions will write off the mortgage if a member is killed in action.  I'm not sure if it's policy (ie so you can get a copy to confirm) or if it's an unwritten rule.

I'm glad that I'm not the only one who delights in seeing the principle go down, and down... and down.... we're moving this summer and will take on a mortgage once again, something I'm not looking forward to, but I will enjoy seeing the balance go down as each regular and extra payment is made.  My friends think I'm off my rocker (maybe I am!).

[dapaterson]

I'm glad that I'm not the only one who delights in seeing the principle go down, and down... and down.... we're moving this summer and will take on a mortgage once again, something I'm not looking forward to, but I will enjoy seeing the balance go down as each regular and extra payment is made.  My friends think I'm off my rocker (maybe I am!).

Not at all.  Look at your monthly mortgage payment (if you have one), then figure out how much more you'd have to earn after taxes to increase your take-home pay by that much.  It's quite astounding.  For example, if you're paying $1500/month on your mortgage, you'd have to earn about $27 000 more each year to get the same benefit as paying off the mortgage (since $1500x12 months = $18000, which, assumign you pay 1/3 in tax, means you need $27K).

Banks like it when you make the smallest possible payments on your debts.  Personally, I'd rather get a $27K pay increase...

[Occam]

Thanks for the answer re: mortgage insurance.  We have also have life insurance via the Personel (via SISIP) which pays off the mortgage and gives dh coverage if he is injured or killed even if it's in war. 

Be careful.  SISIP and The Personal have nothing to do with each other.

SISIP Term life insurance is underwritten by Manulife Financial.

The Personal is a completely unrelated insurance company which provides home and auto insurance to eligible groups, such as the CF.  They don't do life insurance.

[Anny]

Occam is correct, Personel is for our house insurance, Manulife is for our life insurance, who covers what I stated above.  SISIP does recommend them however, even gave me the pamphlets for Personel, handed them to me directly while I was in their office only a few years ago telling me they recommend them because they will cover kits.  I'm curious, have things changed now?  It would be nice, in case there is an option for house insurance companies that cover kits, if only to have a comparison.

[Occam]

Occam is correct, Personel is for our house insurance, Manulife is for our life insurance, who covers what I stated above.  SISIP does recommend them however, even gave me the pamphlets for Personel, handed them to me directly while I was in their office only a few years ago telling me they recommend them because they will cover kits.  I'm curious, have things changed now?  It would be nice, in case there is an option for house insurance companies that cover kits, if only to have a comparison.

Kits?

[CDN Aviator]

Kits?

Military kit i assume.

[Occam]

Military kit i assume.

Ah, that makes some sense.  I was thinking "kit cars?", "kit homes?"...

Not much point in an insurance company covering military kit - if it were stolen or burned in a fire, you'd be able to write it up under a material loss report.  I've only ever heard of someone being liable for issue kit if it were lost due to their own negligence.

[ballz]

I have tenant's insurance with the Personal, and I have $5000 insurance on my kit included with that. It says on the site, "because it's the DND's kit, and your responsible for it." Maybe I'm getting ripped off but it was a good sales pitch, they earned the extra couple bucks a year

A guy on my CAP course had a bunch of stuff stolen during travels, including his kevlar helmet. After some paperwork with the MPs and stuff, I'm pretty sure he ended up footing the bill, or most of the bill, for it. Maybe it's not supposed to be like that, but that was the result. So I'm happy with having the insurance.

On another note, I'm saving an @$$load on auto insurance with the Personal. Almost 2K a year I believe.

[Pusser]

I have tenant's insurance with the Personal, and I have $5000 insurance on my kit included with that. It says on the site, "because it's the DND's kit, and your responsible for it." Maybe I'm getting ripped off but it was a good sales pitch, they earned the extra couple bucks a year

A guy on my CAP course had a bunch of stuff stolen during travels, including his kevlar helmet. After some paperwork with the MPs and stuff, I'm pretty sure he ended up footing the bill, or most of the bill, for it. Maybe it's not supposed to be like that, but that was the result. So I'm happy with having the insurance.

On another note, I'm saving an @$$load on auto insurance with the Personal. Almost 2K a year I believe.

Unless you are negligent, you should never have to pay for any military kit that is lost or destroyed in your home.  If your guy had to pay for the stuff lost during his "travels," I would hope that it was because he never should have been "traveling" with the stuff in the first place.  Bottom line - if your house burns down and your military issue kit (NB: this does not include anything you get through Logistik Unicorp) is destroyed, all you should have to do is fill out the Stores Loss Report so you can get it re-issued.  Only your dress uniforms need to be claimed on your insurance.

As stated above, The Personal and SISIP have nothing to do with each other.  What I suspect happened was a SISIP agent was asked about auto and/or house insurance (which they don't offer) and so gave The Personal as an example of a company that does provide those products and is friendly to the military.

[Redeye]

Has anyone here used the portability clause with ING? Specifically blend and extend, the clause says they will give you their best rate. I am unclear if this simply means their posted rate or the actual rate others are being offered. I like that they don't use the IRD for breaking a mortgage, and I can get p-.9 via a broker, which puts us at 2.1% for a closed variable 5 yr, and their posted rates are always decent but always you can get a lower rate than the posted one. Just curious if anyone here can give an actual experience with ING so I can get a better idea what will happen when we port over in ~3 years with them.

Quick thing here - IRD is never used for variable rate mortgages, it only ever applies to fixed rates.  I'm glad to see some comments about better experiences with ING, because when I used to be involved in the mortgage business I saw a lot of horror shows with them.  Glad to hear that they have improved!

[toughenough]

I'm currently with ING, and trying to figure out my next move.

I'm in the process of settling things from a divorce. ING will do a "release of covenant" and take her name off the mortgage and keep it "as is", but won't approve me on my own for the mortgage due to some credit card debt. If I roll that debt into the mortgage, I'll get approved for it, but will have to pay the penalty for breaking the mortgage.

$6200 to break it outright, $4500 to break it and sign another mortgage with them. Either way, my rate will drop like crazy because I'm on a 4.91 fixed, and looking to be at about 2.3% variable after re-mortgaging. I just don't understand the logic in charging my a fee to resign a (bigger) mortgage with them, where I'll be on the hook for even more interest, over a longer period of time.

Regardless, this thread is very timely.

Cheers

[Redeye]

I'm currently with ING, and trying to figure out my next move.

I'm in the process of settling things from a divorce. ING will do a "release of covenant" and take her name off the mortgage and keep it "as is", but won't approve me on my own for the mortgage due to some credit card debt. If I roll that debt into the mortgage, I'll get approved for it, but will have to pay the penalty for breaking the mortgage.

$6200 to break it outright, $4500 to break it and sign another mortgage with them. Either way, my rate will drop like crazy because I'm on a 4.91 fixed, and looking to be at about 2.3% variable after re-mortgaging. I just don't understand the logic in charging my a fee to resign a (bigger) mortgage with them, where I'll be on the hook for even more interest, over a longer period of time.

Regardless, this thread is very timely.

Cheers

Not hard to explain, actually.  I'll simplify it but this is the basic idea.  When you signed the 4.91% fixed, they had to raise the capital to loan to you - which means they agreed to pay a depositor a certain rate of interest for a certain period of time.  They did this because you agreed to pay them, and they make money on the spread between the two.  If you break your mortgage they still have their obligation - so they'll either charge you a penalty of three months' interest (ie enough time to find a replacement mortgage client) or the Interest Rate Differential, which is essentially the present value of the difference between what they were charging you and what they can get now when they loan the money back out.  Whichever is higher, you pay.

That said, in a case like that, you should be able to get a blended rate without any penalty - the new money at the current rate, the old money stays at the same rate until its maturity date.  You'd have to compare that interest cost to the net savings from breaking the mortgage altogether.  You might well (based on the rates you quoted) wind up saving a lot of money even with the up-front breakage cost.

[toughenough]

That's actually my expectation. Currently I drop $650 a month on debt repayment. If I re-mortgage, with the lower interest, I bet my monthly mortgage payment will be equal to or lesser than it is now (in which case I'd bump it up to equal current and pay off faster). At that point, I'd have $650 of disposable income per month, that I can find ways to spend (pay down mortgage, RRSPs, etc).

[Anny]

I thought ING only had the 3 months interest penalty and no IRD?  Judging by the amount of penalty, it sounds like they are more than charging you three months interest.

The IRD may be dismissed if it's a DND move due to a posting... you're the one with the paperwork so toughenough, I assume you know for certain, I'm just bringing it up because I could have sworn there were no IRD penalities with ING.

By the way, if you work via a broker you'll get P-.9, which means with prime at 3.0 right now, you should be able to get 2.1% variable with ING (5 yr term).  In your case it's well worth breaking that fixed rate you have right now.

[Pusser]

I thought ING only had the 3 months interest penalty and no IRD?  Judging by the amount of penalty, it sounds like they are more than charging you three months interest.

The IRD may be dismissed if it's a DND move due to a posting... you're the one with the paperwork so toughenough, I assume you know for certain, I'm just bringing it up because I could have sworn there were no IRD penalities with ING.

By the way, if you work via a broker you'll get P-.9, which means with prime at 3.0 right now, you should be able to get 2.1% variable with ING (5 yr term).  In your case it's well worth breaking that fixed rate you have right now.

The bottom line is that banks don't lose money and ING, despite operating somewhat differently than most banks, is still a bank.  They will always work the terms of the mortgage in their favour if you need to break it.  A simple three month penalty may not cover their losses if the financial climate goes a certain way.

[Nix]

I thought ING only had the 3 months interest penalty and no IRD?  Judging by the amount of penalty, it sounds like they are more than charging you three months interest.

The IRD may be dismissed if it's a DND move due to a posting... you're the one with the paperwork so toughenough, I assume you know for certain, I'm just bringing it up because I could have sworn there were no IRD penalities with ING.

By the way, if you work via a broker you'll get P-.9, which means with prime at 3.0 right now, you should be able to get 2.1% variable with ING (5 yr term).  In your case it's well worth breaking that fixed rate you have right now.

Annie is correct, ING has a DND/RCMP clause, so a max of 3 months interest should be the penalty, but in toughenough's case it appears he is not doing an IRP move so it may not apply, but there's no harm in asking them.  Toughenough you should ask whomever your contact is to verify this.  I can supply you with a copy (link online) of their DND clause, pm me if you need it thoughenough.

[toughenough]

Thanks for the replies, but it's not a move for a posting - it's actually not even a move, just re-mortgaging on an existing property. So I'm going to assume the DND clause is a mute point?

[Nix]

I would still try it if I were you, simply say you're DND and see what they say, maybe you'll luck out.

[Pusser]

Small point:  DND and CF are not synonymous.  In fact, the CF and DND are separate entities.  I doubt ING has a "DND" clause.  They might have a "CF" clause, but I really don't think they offer that kind of deal to civilian employees of the department.  It would make more sense if it was restricted to CF members.  In fact, if they insist it is a "DND" clause, it wouldn't actually apply to CF members as we are not part of DND.

[Nix]

Good point Pusser.  ING indeed calls it "DND" policy (as in they use the DND acronym, not CF), but it only applies when you are posted and doing an IRP move, and I doubt (although I'm not positive) any civvys actually get posted so it would not apply in their case.

[kawa11]

He didn't say he had mortgage insurance.  Actually, he correctly stated that for the most part, mortgage insurance offered by the banks is mostly useless to CF members because of the plethora of exclusions they have.

What he said was that SISIP is a cheaper alternative to mortgage insurance, and has none of the exclusions which would affect CF members.

This is kind of an eye opener to me. When I signed my mortgage [& mortgage insurance] I don't think I thought I'd be joining the CF.
Someone tell me there's gonna be a clerk somewhere with all the answers or some kind of list of "CF Friendly" insurers..

[Occam]

This is kind of an eye opener to me. When I signed my mortgage [& mortgage insurance] I don't think I thought I'd be joining the CF.
Someone tell me there's gonna be a clerk somewhere with all the answers or some kind of list of "CF Friendly" insurers..

I'm reasonably sure that your mortgage insurance is not "locked-in"; that is, you can cancel it at any time if you choose.  If you join the CF, investigate cancelling the mortgage insurance.  SISIP would be much cheaper, and not have any pesky clauses that will prevent the insurer from paying out if you pass on as a result of military service.

Between SISIP Group Term insurance (maximum $400,000 coverage for you, and the same for your spouse), SISIP Supplementary Death Benefit (2 x your yearly base salary), and any Veterans Affairs survivor benefit your spouse would get, if your mortgage isn't paid off upon your untimely demise, with a fair amount to spare, you have too much house.

[kawa11]

I'm reasonably sure that your mortgage insurance is not "locked-in"; that is, you can cancel it at any time if you choose.  If you join the CF, investigate cancelling the mortgage insurance.  SISIP would be much cheaper, and not have any pesky clauses that will prevent the insurer from paying out if you pass on as a result of military service.

Between SISIP Group Term insurance (maximum $400,000 coverage for you, and the same for your spouse), SISIP Supplementary Death Benefit (2 x your yearly base salary), and any Veterans Affairs survivor benefit your spouse would get, if your mortgage isn't paid off upon your untimely demise, with a fair amount to spare, you have too much house.

I'm young, have a family and tired of living in cramped spaces - "too much house" is a far off dream not a burden! 

Thanks for your input. I'll be sure to look into SISIP.

[Occam]

I'm young, have a family and tired of living in cramped spaces - "too much house" is a far off dream not a burden! 

Thanks for your input. I'll be sure to look into SISIP.

Sounds like you have your head screwed on the correct number of turns.   

Using the age you posted previously, and the fact that you posted that you're a smoker (or at least have smoked a cigarette in the last year), $400000 of SISIP OGTI would cost you $38 per month.  That's pretty hard to beat.  I'm almost 45 and an ex-smoker (more than three years since I quit now), and my rate is just about to jump from $42 to $54 per month for the same coverage.