Key Post Break fee for some borrowers was wrongly calculated by KBC

I requested my redemption amount on 3rd May and I received the letter from KBC today. The letter was dated the 6th of May and the Breakage Fee is zero.

Month by month since the start of the year there was little change, then a huge drop.

DateFee
26-JAN-223,012
14-MAR-222,901
12-APR-222,840
29-APR-222,787
06-MAY-220

I'm glad it reduced to zero but I don't understand it. @mortgagebreaker and I can take advantage of KBC's generosity.

Thanks very much to @Paul F for all the help and information on these posts.
 
There is an important issue here.

Did some people break and pay too high a fee?

Did some people choose not to switch because of the very high break fee?

KBC should explain.

Brendan
 
Brendan Burgess said:
Did some people choose not to switch because of the very high break fee?
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This happened to me. I would have left earlier in the year if the fee was lower. The fee didn't have to be zero, a few hundred euros would have made it worthwhile to switch. I missed out on Avant's & Finance Ireland's switching contributions (both were providing up to €1,500 until the 31st of March) and missed out on Avant's lower rates too. On the latter, there isn't much chance of getting our application into Avant before the deadline both our current broker and Avant are swamped with applications.

I'll raise a complaint with KBC. The lack of transparency around their breakage fee calculations alone is enough for a complaint.
 
FWIW I requested a part-break from KBC on 17th April. There was some debate about whether they still allowed part breaks, but they decided they did. Said it would take 2 weeks to get a call with the cost and a pack would be issued after that. I have not heard from them yet, guess they have a lot on!
 
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I was quoted a break fee of €501 in Feb and €535 in March. I couldn't understand how KBC calculated it, even when they gave me figures to put into the formula, and was concerned it would increase further so I just paid it.
 
T-F

Watch this space. It seems odd that it has reduced so suddenly and so dramatically for others.

There may be a valid explanation, or they may have been making a mistake. If they were making a mistake, then you should get your money back.

Brendan
 
Hi, I had the same issue with KBC break fee, was quoted 530 in Jan bit since then it was slowly coming down but then started to rise again. I decided to break out at 690 around the 20th of April. I'M still not convinced I was right to break out and pay but at the time it did not make sense fee goin back up?
 
Mort.Switcher22 said:
Hi, I had the same issue with KBC break fee, was quoted 530 in Jan bit since then it was slowly coming down but then started to rise again. I decided to break out at 690 around the 20th of April. I'M still not convinced I was right to break out and pay but at the time it did not make sense fee goin back up?
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Sorry I can provide the details behind the break fee aswell if it may help to understand kBC calculations:
Kbc fixed 5 yrs at 2.6 in June 19 with mortgage balance 290k.
Broke out in Apr 22 with Mortgage Balance 251k for a fee of 690..did ring KBC to provide the rates applied to this calculation. Rang on numerous occasions between Jan to Apr on break fee quotes. Also raised a complaint due to KBC not providing me with the numbers behind calculation
 
I complained about KBC's communications around the calculation of the break fee. They confirmed in writing that the prevailing rate they used on 15 Feb 2022 was -0.2 and the rate they used on 4 March 2022 was -0.21. So it seems KBC's cost of borrowing was falling at a time when interbank rates were generally rising?
 
Thrifty_Fifty said:
I complained about KBC's communications around the calculation of the break fee. They confirmed in writing that the prevailing rate they used on 15 Feb 2022 was -0.2 and the rate they used on 4 March 2022 was -0.21. So it seems KBC's cost of borrowing was falling at a time when interbank rates were generally rising?
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I just received a letter from KBC advising that the break funding fee applied was incorrect and they will provide a refund.

I appreciate mistakes can happen and although it wasn't a huge amount of money in my case, I'm glad the error is being rectified, however, it is a little annoying that this error was not picked up on at the time that I queried their calculation and asked for confirmation that a) the prevailing Fixing Rate when I broke was negative and b) that this rate fell between two dates.

I hope if others were overcharged they too will receive a refund. I also hope that people were not discouraged from switching when interests were lower due to an incorrect break fee quote....
 
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Thrifty_Fifty said:
I just received a letter from KBC advising that the break funding fee applied was incorrect and they will provide a refund.

I appreciate mistakes can happen and although it wasn't a huge amount of money in my case, I'm glad the error is being rectified, however, it is a little annoying that this error was not picked up on at the time that I queried their calculation and asked for confirmation that a) the prevailing Fixing Rate when I broke was negative and b) that this rate fell between two dates.

I hope if others were overcharged they too will receive a refund. I also hope that people were not discouraged from switching when interests were lower due to an incorrect break fee quote....
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Wow!

That is incredibly frustrating. We've missed out on multiple lower rates because of the artificially high breakage fee at that start of the year. We couldn't afford to take the hit short term. I assume they won't go public with this mess and people will have to complain to receive a refund on the breakage fee.

I drafted a complaint months ago however never sent it into KBC. A new baby made things too busy and then I forgot. I'll have to make an effort send a complaint.

Thanks for posting this and letting us know. Great work @Thrifty_Fifty, thank you.
 
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@Thrifty_Fifty Well done!

There could be plenty of people who were overcharged, and many more who were put off from switching to a really good rate because of the wrong break fee quote.

Apart from Thrifty_Fifty and @boconaill, @mortgagebreaker and @manion may also have been affected, and that's just from this thread.

What are the chances that KBC are proactively contacting this cohort and refunding them? Slim to none, I'd say.
 
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Paul F said:
@Thrifty_Fifty Well done!

There could be plenty of people who were overcharged, and many more who were put off from switching to a really good rate because of the wrong break fee quote.

Apart from Thrifty_Fifty and @boconaill, @mortgagebreaker and @manion may also have been affected, and that's just from this thread.

What are the changes that KBC are proactively contacting this cohort and refunding them? Slim to none, I'd say.
Click to expand...

Paul F said:
@Thrifty_Fifty Well done!

There could be plenty of people who were overcharged, and many more who were put off from switching to a really good rate because of the wrong break fee quote.

Apart from Thrifty_Fifty and @boconaill, @mortgagebreaker and @manion may also have been affected, and that's just from this thread.

What are the changes that KBC are proactively contacting this cohort and refunding them? Slim to none, I'd say.
Click to expand...
Hi, I received a letter back in June apologising and stating the incorrect rate was used in my break off fee calculation. Was refunded the fee I had paid in May, Great to get the refund but very annoying that we delayed for months on switching due to inaccurate calculations on break fee been issued.
 
Mort.Switcher22 said:
Hi, I received a letter back in June apologising and stating the incorrect rate was used in my break off fee calculation. Was refunded the fee I had paid in May, Great to get the refund but very annoying that we delayed for months on switching due to inaccurate calculations on break fee been issued.
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Did you only get the refund after raising a complaint? How much was the refund?

Did the delay cause you to miss out on any low rates from other lenders who subsequently increased their rates?
 
Paul F said:
Did you only get the refund after raising a complaint? How much was the refund?

Did the delay cause you to miss out on any low rates from other lenders who subsequently increased their rates?
Click to expand...
Yes I raised a complaint back in March as was not getting a reasonable explanation as to why the break fee quoted was increasing at a time when the interbank rates where coming down, eventually bit the bullet and paid the break fee in May as wanted at that stage to refix for fear of rate increases. Received the letter of apology in June and refunded the cost. Very disappointed as was hoping to move to ICS back in Jan but by May when paid the break fee ICS fixed rate increased so did totally impact our decision, ended up refixing with KBC.
 
I have copied some posts from the mega switcher thread into this thread to keep them all in the same place.

Brendan
 
So presumably this was a systemic error by KBC.

Anyone who was given the wrong break fee will have to be redressed.

1) If you were given the wrong break fee, paid it, and then switched or refixed, a refund of the fee is adequate redress.

2) If you were given the wrong break fee, but decided not to break out and refix, then you probably have not lost out as you can still refix with KBC at the same rates.

3) If you were thinking of switching to Avant or some other lender but didn't do so because you were quoted the wrong break fee, then you are entitled to redress. The calculation of this redress will be complicated. They should match the rate you could have got on the date you applied for the fixed rate break fee.

4) If you did not ask for a break fee, then you were not impacted.

Brendan
 
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So what should happen next?

Any individual who asked for a break fee and chose not to break should write a letter of complaint to KBC. Tell them you have missed out on Avant rates and you want compensation accordingly. If you still want to switch to another lender, go ahead. This won't affect your claim.

But many people who asked for a break fee and did not break because it was too high, would be blissfully unaware of this.

The Central Bank will have to tell KBC to run a redress programme.

Brendan
 
Hmmm, this sounds like a serious customer issue that has affected a significant number of people. Any word from the Central Bank that they are even aware of it???
 
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