Costs of switching a mortgage, job changed

Hi everyone, apologies if this has been asked before but I cannot find the specific answer to this. At the moment I have a joint mortgage with my husband since 2004 with KBC Bank. We are paying 4.5% and there seems much better deals out there.

My query is, I have since been made unemployed (a year ago) since we took out the original mortgage, if we switch does this affect us in any way? ie do the bank taking on the mortgage look at the salaries etc.? We owe €177K on our mortgage and our LTV is about 35-40%.
Also what are the costs involved..solicitors fees etc?

We've tried negotiating with KBC but they are reluctant to do anything for us unless we open a current account with them which we dont want to do as we have free fees with our current bank.

Thanks for any advice!

The new bank will be underwriting the loan as a new application so they will be looking at income as though you were a new borrower.

You also need to check the LTV you quote.

In a thread this time last year you quoted 65% LTV. Now you are quoting a LTV of 35-40%. House prices didn't increase that much in last 12 months so assume you knocked lump sum off mortgage?

lollipop said:

We've tried negotiating with KBC but they are reluctant to do anything for us unless we open a current account with them which we dont want to do as we have free fees with our current bank.

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This is a great illustration of the very expensive obsession with bank charges which most people have.

KBC give their customers a reduction of 0.2% if they have their current account with them. €177k@ 0.2% is €354. How much would the fees be on the KBC account? €100? This is a no brainer. Open a current account with KBC - you can keep your other account as it's free.

Will KBC offer you a reduction on the 4.5% over and above the 0.2%?

If you are unemployed at present, I think that a new lender will look at just your husband's salary. If you want a loan of €177k , he will need a salary of around €50k, as they can lend 3.5 times his gross salary. Actually, as it's a switcher mortgage the Central Bank rules don't apply, so it's entirely up the lender what criteria they use. As it's a low LTV and as you have a good credit record, they will probably give you the money.

So KBC will offer you a better rate if you move current account. Surely paying for a current account is far less then the savings from a reduced rate never mind the costs and hassle of switching.

Apologies in getting back to this thread so late! An update, we have now decided to switch to TSB from KBC due to lots of hassle and general bad administration from KBC plus found them quite slow in approving anything. Our LTV is definitely approx 50% (apologies dont know where I got 35-40%). We owe €177K and houses the same in this area sold recently for approx €360K. Switching to TSB gives us a rate of 3.87% APR as opposed to the 4.3% from KBC they refused to drop any lower. I know there are switching fees involved but it still definitely seems worth it. Will keep this thread updated as to how easy the switching process is.