KBC rates - should I fix

shnethb

Hi All. Looking for advice.
I have a mortgage with KBC with a variable rate of 4.25% repayments of approx €1149 per month.

I recently opened a Current account with them to avail of a .20% discount which brings my rate down to 4.05.

I phoned them today to ask about a fixed rate. 2 years @ 3.9 3 years@3.95 and 5 years@ 4% (not including my .20% discount).

Im seeking advice on is it advisable to fit. Im tempted by the 2 year fixed rate.

I do not like banking with KBC. I am very sorry I moved my current account to them. If I had know the process would be as painful I would not have move. I find them to be very inept at what they do. I dont trust them at all having been told many things over the last few months that I have found to be untrue but unfortunately I am stuck with them until my home comes out of negative equity.
So what are your thoughts on fixing. is it a good thing or should I wait. to fix for 2 years would save me approx €56 per month.

bunderoon

shnethb wrote: »

Hi All. Looking for advice.
I have a mortgage with KBC with a variable rate of 4.25% repayments of approx €1149 per month.

I recently opened a Current account with them to avail of a .20% discount which brings my rate down to 4.05.

I phoned them today to ask about a fixed rate. 2 years @ 3.9 3 years@3.95 and 5 years@ 4% (not including my .20% discount).

Im seeking advice on is it advisable to fit. Im tempted by the 2 year fixed rate.

I do not like banking with KBC. I am very sorry I moved my current account to them. If I had know the process would be as painful I would not have move. I find them to be very inept at what they do. I dont trust them at all having been told many things over the last few months that I have found to be untrue but unfortunately I am stuck with them until my home comes out of negative equity.
So what are your thoughts on fixing. is it a good thing or should I wait. to fix for 2 years would save me approx €56 per month.

What's your LTV? Have you checked Bonkers?
If BOI are fixing at 3% for 3 years and 3.2% for 5 years, you'd have thought that KBC would beat 3.9%.

shnethb

bunderoon wrote: »

What's your LTV? Have you checked Bonkers?
If BOI are fixing at 3% for 3 years and 3.2% for 5 years, you'd have thought that KBC would beat 3.9%.

The house is approx 20K in negative equity now. that LTV is 110% by my calculations. (I think)

van_beano

Sorry to hear of your predicament. Nobody can really say which way rates are going to go. At the moment both those variable rates and fixed rates seem quite high compared to other lenders.

Fixing might seem the lesser of two evils just to save you on the monthly repayments.

Switching would be your best approach but don't know if that's possible being in NE.

listermint

The length of time on the fixed rate appears reasonable tbh. I would not advocate fixing for longer.

shnethb

van_beano wrote: »

Sorry to hear of your predicament. Nobody can really say which way rates are going to go. At the moment both those variable rates and fixed rates seem quite high compared to other lenders.

Fixing might seem the lesser of two evils just to save you on the monthly repayments.

Switching would be your best approach but don't know if that's possible being in NE.

Thanks for the replies. Would love to switch and be done with KBC but cant with NE.

Trish56

KBC introduced a 2.95% 10 year fixed rate in November which I though was for both existing and new customers. If it's your forever home and you are eligible to apply for it, it is a no brainer as the only way rates are going to go in the future is upwards.

KBC are one of the bank that did not pass on the ECB rate reductions to existing customers charging them 4.30% when AIB charge 3.15% thereby penalizing existing customers who are still in negative equity. I'm sure you like others will gladly switch when out of negative equity.

shnethb

Trish56 wrote: »

KBC introduced a 2.95% 10 year fixed rate in November which I though was for both existing and new customers. If it's your forever home and you are eligible to apply for it, it is a no brainer as the only way rates are going to go in the future is upwards.

KBC are one of the bank that did not pass on the ECB rate reductions to existing customers charging them 4.30% when AIB charge 3.15% thereby penalizing existing customers who are still in negative equity. I'm sure you like others will gladly switch when out of negative equity.

Thanks Trish56, unfortunately I dont qualify for that rate as the LTV is >90%. Its no longer our forever house as its small and the family has grown since we bought it in 2007.

Trish56

I think I would stick with the variable rate so and fire as much money as you can to reduce the principal balance and fingers crossed the value will increase taking you out of negative equity and you can switch to another lender.

The risk you are taking if you fix in for 2 years is that when the two years expire interest rates may have gone up as its expected rates may rise in 2019/2020.

Do you plan on selling when out of negative equity?

CeilingFly

When did you take out the mortgage and could you be part of the tracker review going on?

If mortgage was taken out up to early 2008, it may be part of the review

shnethb

CeilingFly wrote: »

When did you take out the mortgage and could you be part of the tracker review going on?

If mortgage was taken out up to early 2008, it may be part of the review

I took out the mortgage in 2007 but missed out on a tracker. I have decided to fix in the end. Was reading up at the weekend and ithe general census is that rates are not going to drop more. New rate for 2 years of 3.7 down from 4.25, saving approx €90 per month. Better in my pocket then theirs........

Hopefully in two years things will equal out and we can switch at that stage.

CeilingFly

shnethb wrote: »

I took out the mortgage in 2007 but missed out on a tracker. I have decided to fix in the end. Was reading up at the weekend and ithe general census is that rates are not going to drop more. New rate for 2 years of 3.7 down from 4.25, saving approx €90 per month. Better in my pocket then theirs........

Hopefully in two years things will equal out and we can switch at that stage.

Did you fix initially? and did you use a broker?

If you fixed initially you should then have rolled over to a tracker rate of 0.95% - 1.25% depending on loan amount and LTV.

All loans issued from Nov 2006 to Feb 2008 are "in scope" of the tracker review

shnethb

CeilingFly wrote: »

Did you fix initially? and did you use a broker?

If you fixed initially you should then have rolled over to a tracker rate of 0.95% - 1.25% depending on loan amount and LTV.

All loans issued from Nov 2006 to Feb 2008 are "in scope" of the tracker review

Hi Ceiling fly. Yeah, we fixed initially and we did use a broker.
I have had a look at the contract we signed at the time (March 2008) there is no mention of a tracker rate on it anywhere. More's the pity

CeilingFly

shnethb wrote: »

Hi Ceiling fly. Yeah, we fixed initially and we did use a broker.
I have had a look at the contract we signed at the time (March 2008) there is no mention of a tracker rate on it anywhere. More's the pity

The cutoff point for the tracker examination is Feb 2008, amd thats applications not drawdown. So.if you drew down in March 2008, then I'd assume the application was 3-4 months previously.

Brokers were told that all fixed rate mortgages from November 2006 to Feb 2008 would roll onto 1.25% tracker when fixed rate was up.

Maybe call them and ask if your mortgage is in scope of the examination

Here's their press release
https://www.kbc.ie/news-and-press/latest-news-and-press-releases/update-from-kbc-bank-ireland-regarding-the-tracker

Also check out the thread on the AAM site all about kbc tracker - the infamous flyer is on this page
https://www.askaboutmoney.com/threads/kbc-statement-on-tracker-redress.205700/page-6

shnethb

CeilingFly wrote: »

The cutoff point for the tracker examination is Feb 2008, amd thats applications not drawdown. So.if you drew down in March 2008, then I'd assume the application was 3-4 months previously.

Brokers were told that all fixed rate mortgages from November 2006 to Feb 2008 would roll onto 1.25% tracker when fixed rate was up.

Maybe call them and ask if your mortgage is in scope of the examination

Here's their press release
https://www.kbc.ie/news-and-press/latest-news-and-press-releases/update-from-kbc-bank-ireland-regarding-the-tracker

Also check out the thread on the AAM site all about kbc tracker - the infamous flyer is on this page
https://www.askaboutmoney.com/threads/kbc-statement-on-tracker-redress.205700/page-6

Hi. Thanks for this. Just had a quick look at my documentation and it is dated feb 08. Had a read of the thread you sent me and we might have been affected. I am away at the moment so don’t know if we got a letter. Will be home tomorrow. If I don’t what do you recommend I do?

CeilingFly

shnethb wrote: »

Hi. Thanks for this. Just had a quick look at my documentation and it is dated feb 08. Had a read of the thread you sent me and we might have been affected. I am away at the moment so don’t know if we got a letter. Will be home tomorrow. If I don’t what do you recommend I do?

If the letter is there jump up and down and look forward to a decent refund (I'm expecting €60k+, but I was on variable from late 2008, so that over 9 years of overcharge) and big reduction in your mortgage payments.

If its not there call them and ask if you are included and if not, why not.

CeilingFly

I see from aam that you got a letter. From another kbc thread it looks loke your fixed rate ended in feb 2011. So you are due seven years of overpayment refund.

Based on your 1100 repayment, I'll hazard a guess that your original mortgage was circa 250k and that would mean the overpayment is in the region of €30,000. Its not easy to calculate due to the way mortgage payments work, but it will be in that region.

By getting the letter you can be near certain of refund and getting a 1.25% tracker. And they say yesterday was "blue Monday"!!

shnethb

CeilingFly wrote: »

I see from aam that you got a letter. From another kbc thread it looks loke your fixed rate ended in feb 2011. So you are due seven years of overpayment refund.

Based on your 1100 repayment, I'll hazard a guess that your original mortgage was circa 250k and that would mean the overpayment is in the region of €30,000. Its not easy to calculate due to the way mortgage payments work, but it will be in that region.

By getting the letter you can be near certain of refund and getting a 1.25% tracker. And they say yesterday was "blue Monday"!!

Hi CeilingFly. Yes, I tried to send you a PM but it wouldnt allow me. So that I understand this (i will phone kbc in the morning) I took out the mortgage in Feb 2008 fixed for 3 years. mortgage was a 100% mortgage and the amount was 240k. am i right in saying that KBC should have put me on a tracker in 2011? I cant see this on my statement so I will have to check again.

CeilingFly

It won't be on any statement. Its to do with what they promised brokers and this now must be implemented.

The tracker rate will be backdated to 2011 in your case.

The balance of your mortgage will probably change downwards and you will receive a refund and an amount for compensation - about 10%-15% of the overpayment.

No need to contact them. It will take a few weeks, but its a nice start to the year.

On your figures, my 30k guess is about right. Plus a new monthly payment of about €850.

The lower mortgage payment will show first - I'm guessing March - April at latest.

shnethb

CeilingFly wrote: »

It won't be on any statement. Its to do with what they promised brokers and this now must be implemented.

The tracker rate will be backdated to 2011 in your case.

The balance of your mortgage will probably change downwards and you will receive a refund and an amount for compensation - about 10%-15% of the overpayment.

No need to contact them. It will take a few weeks, but its a nice start to the year.

On your figures, my 30k guess is about right. Plus a new monthly payment of about €850.

The lower mortgage payment will show first - I'm guessing March - April at latest.

So now we just sit and wiat

CeilingFly

shnethb wrote: »

So now we just sit and wiat

yep - it been 9 years for me, so a few more weeks is nothing.

You can take it that they would not have sent the letter that states clearly "you have been deemed impacted" and then not to give you the tracker. They also have publically said all these will be put on the correct tracker rate and refunded the overpayment.

Sort of hard to believe as up to last week you were looking at what fixed rate is best for you.

Nice surprise for mid January!

shnethb

CeilingFly wrote: »

yep - it been 9 years for me, so a few more weeks is nothing.

You can take it that they would not have sent the letter that states clearly "you have been deemed impacted" and then not to give you the tracker. They also have publically said all these will be put on the correct tracker rate and refunded the overpayment.

Sort of hard to believe as up to last week you were looking at what fixed rate is best for you.

Nice surprise for mid January!

I know....