KBC charging an arrangement fee of 0.5%?

cc77

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I'm applying for a mortgage from KBC and a couple of the Terms & Conditions have concerned me. These are on the application form. The first is

Consent Under the Consumer Credit Act, 1995
The applicant hereby consents for the purposes of Section 46 of the Consumer Credit Act 1995, to any telephone call, at home, at work, and on a mobile phone, or to any visit at home or at work from KBC Bank Ireland, to the applicant(s), the applicants employers, or any member of his/her family or any person acting on his/her behalf.

There is room underneath for both parties to sign. I presume if we don't sign our application won't be considered, but this condition seems a bit much to me. Is that standard?

The second relates to fees. It states "Each alteration to the mortgage product (inc rate) may be charged at a cost of €38, the processing of each update to property insurance details may be charged at a cost of €30 and the processing of each updated life assurance details at a cost of €30."

I presume this means that any change they decide to make to the variable interest rate they could charge €38. And also property insurance is likely to change every year so that's another regular cost.

An arrangement fee of 0.5% when the loan check is ready for issue is also mentioned. Does anyone know how likely it is that any of these charges will be levied?

KBC appear to have very competitive rates, but is that just because of lots of hidden fees?

Thanks
 
"Each alteration to the mortgage product (inc rate) may be charged at a cost of €38, the processing of each update to property insurance details may be charged at a cost of €30 and the processing of each updated life assurance details at a cost of €30."

It would be normal for KBC to charge an application fee for mortgages here in Europe. You would have been aware of that from your meeting with them.

In relation to the above costs, 'may' is used, so those costs may be waived or are negotiable at the time.

You are highly unlikely during the life time of your mortgage to change life insurance. Because the costs get higher as you get older.

In relation to House insurance, will you change it annually, I don't notify my bank when I change providers, is that compulsory? This you are more likely to change.

What interest rate are you on, if you are on variable, each time that goes up or down you will not be charged, that clause seems to me to be where you change rates, eg move to a fixed rate or somesuch. At that time you would presumably be gaining by switching and 38€ is not a hill of beans.

About them visiting you at work, well if you don't like that clause, I suggest you sign it now, if otherwise it would prevent you getting the mortgage, and rescind it later (if you can).

Currently I'm fixing and they had a clause on it about visiting at work or by phone or something, and I ticked no (it was separate on the form) they cannot contact me. They'd have an awful job to visit me though.
 
Thanks for your reply Bronte. I haven't met with KBC and when I spoke with them on the phone a few months ago an arrangement fee wasn't mentioned. I might go into them - I'd prefer to drop in the application and go through it with them in person then posting everything off and waiting for a response. Do you know if you need to make an appointment first or could I just drop in to their head office in town?

I wasn't sure if they were referring to normal variable rate changes, which can happen on their whim rather than a change I proposed. I don't mind the fee if I'm changing to a fixed rate, for example.

I've heard of some banks contacting customers periodically requesting a copy of the property insurance, so that's why I was concerned about the charge for updating that. I wouldn't inform them unless they requested it.
 
I presume this means that any change they decide to make to the variable interest rate they could charge €38. And also property insurance is likely to change every year so that's another regular cost.

That is not what this means. This means that if you change your policy to a different company, they will charge you for the admin work involved by them. Seems reasonable to me if you are changing your insurance every year.



An arrangement fee of 0.5% when the loan check is ready for issue is also mentioned. Does anyone know how likely it is that any of these charges will be levied?

I had not heard of this and this is a much bigger issue. That would be €1,500 on a €300,000 mortgage. You could change your insurance policy every year for 25 years and still not incur this fee.

Brendan
 
Thanks Brendan. I thought the arrangement fee was very high too. I'm going to contact them to see if they will waive it. I'm not sure if that's something they do regularly. I had met with AIB & BOI & I don't think either of them charged arrangement fees. I thought it was something that was done away with years ago.

On the insurance, I tend to ring around at renewal time every year to see if I can get a better price so I would be likely to change that policy every year or 2. I guess I'll just have to factor the €30 fee into any quote I get. In practice they may never ask to see the insurance policy. I know when I had a mortgage with Ulster Bank they only looked for the policy before mortgage drawdown.

KBC seem to have the best rates but I might look at AIB & BOI again keeping in mind the arrangement fee and other charges.
 
I contacted KBC today & they said they generally waive the arrangement fee. Worthwhile double checking before applying to them though.
 
Is it a home loan or a loan for an investment property?

Are you going directly or through a broker? It's possible that they charge broker introduced business this fee to pay the commission.

I think you should strike a line through that line in the mortgage offer and return it to them. Don't rely on a phone call.

Brendan
 
It's for a home loan and I've gone directly to the bank. I'll do as you suggest and strike that condition out. I have an appointment with them tomorrow.

Thanks for the advice.
 
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