KBC Did KBC put some people back on a prevailing tracker rate when no rate was mentioned in the contract

unfortunate

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I know what you are saying brendan, but i am answering with the wording in my stuff. This shows that some booklets, at least, may not have the wording you are looking for. However, as there is no dates on booklets as to time of issue, I don't know what period the booklet I have is from, (it is a photocopy that came in my data request). Therefore were terms used in booklets changed as time moved on.
 

Wonder

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Hi Brendan.
Rate I was on in July and August 2006 was 4.34 , and 4.59 in September 2006 .
Both a difference of 1.34 from the ECB of which was 3.00 for July and August and 3.25 for September. Prevailing rate .
Rates in handbook, 3 rates. Fixed. Variable, Split.
 

peemac

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Hi Brendan.
Rate I was on in July and August 2006 was 4.34 , and 4.59 in September 2006 .
Both a difference of 1.34 from the ECB of which was 3.00 for July and August and 3.25 for September. Prevailing rate .
Rates in handbook, 3 rates. Fixed. Variable, Split.
Variable rates in general followed the ECB rates, so those differences would be quite normal for all bank's standard variable rates in a competitive environment. It was only from late 2008 that a divergence appeared.

I checked a previous mortgage I had with Bank of Ireland from Jan 2003 - Jan 2005 (variable rate at discretion of the bank) and it was 1.49% above the ecb rate at the start and it was 1.49% above the ecb rate when I redeemed it in Jan 2006 when I moved house and during the 3 year period, it was almost always 1.49% difference.
 

Bronte

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I don't understand that.

The Handbook is part of the contract or very close to it.
The flyer is very much more distant.

I would have argued both but prioritised the handbook.
Brendan
I would consider a handbook more part of the contract then the flier. For example my house insurance contact has a handbook, and it can change from year to year. I always thought in that case the handbook was part of the contract.

Also can’t see a court being happy with a handbook for customers that diverges from the contract.
 

Wonder

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Peemac
Kbc did not have a standard variable rate during this time, (Fixed, Variable "tracker ", or split)
 

Trustnobody

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Variable rates in general followed the ECB rates, so those differences would be quite normal for all bank's standard variable rates in a competitive environment. It was only from late 2008 that a divergence appeared.

I checked a previous mortgage I had with Bank of Ireland from Jan 2003 - Jan 2005 (variable rate at discretion of the bank) and it was 1.49% above the ecb rate at the start and it was 1.49% above the ecb rate when I redeemed it in Jan 2006 when I moved house and during the 3 year period, it was almost always 1.49% difference.
As I understand it trackers are linked to the ECB rate so if there was a change in the ECB rate the rate for tracker customers automatically reflected the full ECB rate change Eg if you had a margin of 1.1 above the ECB rate and the ECB rate increased from 2 % to 2.25 % the tracker customer rate would change from 3.1 % to 3.35 %.
As you rightly say variable rates follow the ECB rates including SVRs but generally at the bank discretion. They may or may not pass on an ECB rate change to SVR customers and may not pass it on in full .
With respect to KBC cases, for those who started on discounted rates to roll onto prevailing rates as opposed to a fixed rate, if they received letters passing on in full ECB rate increases in 2006, this may evidence that they were on discounted rates linked to a tracker product as opposed to an SVR product. I don't think changes in ECB were passed to SVR customers in full in those years if at all in early 2006.

And back to a constant query on all the KBC threads , did they even have an SVR product 2005-2007 for residential and buy to lets
 

peemac

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As I understand it trackers are linked to the ECB rate so if there was a change in the ECB rate the rate for tracker customers automatically reflected the full ECB rate change Eg if you had a margin of 1.1 above the ECB rate and the ECB rate increased from 2 % to 2.25 % the tracker customer rate would change from 3.1 % to 3.35 %.
As you rightly say variable rates follow the ECB rates including SVRs but generally at the bank discretion. They may or may not pass on an ECB rate change to SVR customers and may not pass it on in full .
With respect to KBC cases, for those who started on discounted rates to roll onto prevailing rates as opposed to a fixed rate, if they received letters passing on in full ECB rate increases in 2006, this may evidence that they were on discounted rates linked to a tracker product as opposed to an SVR product. I don't think changes in ECB were passed to SVR customers in full in those years if at all in early 2006.

And back to a constant query on all the KBC threads , did they even have an SVR product 2005-2007 for residential and buy to lets
Trackers are indeed linked to the ECB rate and the rate changes automatically.

But before 2008, standard variable rates effectively tracked the ECB rate too with rarely more than a month's delay. The only real difference is that a specific margin above the ECB rate was not guaranteed. Hence it is nigh on impossible to show that because your rate changed with the ECB (or previously to that the Central bank of Ireland) that this shows any hint of a tracker at a specific rate above the ECB.

If a bank did not pass on the rate in a timely manner, the media would have run headlines about it and it would also mean that their rate was out of sync with other banks and therefore they would lose new business. - It was quite a simple system and it worked.

As for KBC having a SVR - of course they did as many of their existing loan book at the time were on SVR, so the rate existed. It may not have been marketed as the market itself had no interest in it. (I sell candles - I have Christmas candles in stock and available, but I don't display them because there's no demand for them in April, but if you asked me for one, I'd be able to get it from the warehouse)
 

Johnc6

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As for KBC having a SVR - of course they did as many of their existing loan book at the time were on SVR, so the rate existed. It may not have been marketed as the market itself had no interest in it. (I sell candles - I have Christmas candles in stock and available, but I don't display them because there's no demand for them in April, but if you asked me for one, I'd be able to get it from the warehouse)
Hi Peemac, agree they had the rate however they have told me that the term Standard Varaible Rate was only introduced to loan offer documentation in 2013.
 

Gimmestrength

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As for KBC having a SVR - of course they did as many of their existing loan book at the time were on SVR, so the rate existed. It may not have been marketed as the market itself had no interest in it. (I sell candles - I have Christmas candles in stock and available, but I don't display them because there's no demand for them in April, but if you asked me for one, I'd be able to get it from the warehouse)
Yep isn't that exactly the point here that they technically had an SVR available if you wanted but it was not the product being sold by brokers (95% of mortgages at time through brokers) on KBC's behalf or by the bank directly. The bank might turn around now and try to claim it was correctly an SVR when the product sold at the time was a tracker and the expectation at the time of contract signing that roll off would be to tracker. They cannot be allowed to shift the goalposts after the fact .... although they have tried....
 

peemac

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639
Yep isn't that exactly the point here that they technically had an SVR available if you wanted but it was not the product being sold by brokers (95% of mortgages at time through brokers) on KBC's behalf or by the bank directly. The bank might turn around now and try to claim it was correctly an SVR when the product sold at the time was a tracker and the expectation at the time of contract signing that roll off would be to tracker. They cannot be allowed to shift the goalposts after the fact .... although they have tried....
A broker is not going to tell a client about a rate that is very similar but not as good value. So whilst they were probably available (and no reason to say they weren't) no broker with half a brain would suggest a client takes a SVR when a good tracker was available.

Remember, trackers were relatively new - SVR / Fixed were the main rates offered by all banks up to 2002/2003. Only in 2004 did trackers strat becoming more prevalent and it was 2005 that they were the "fashion" mortgage and due to the mortgage war, they were keenly priced.

Fixed rates were keenly priced too as this allowed banks offer a higher multiple of your salary as a mortgage (source = P. Kissane)

Standard variable Rates applied to many of the mortgages the banks had, (any rate change would have been applied to EVERY svr mortgage on the books) so with the tracker war, the SVR was not good value and thus no broker offered it - as it did not make financial sense
 
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