Key Post I have a KBC tracker – should I consider fixing?

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Ashmck

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Moderator's note, Feb 2023: It looks like all (or almost all) KBC mortgages have now transferred to Bank of Ireland. If that is the case for your mortgage, your options are:
  • Stay on your tracker rate
  • Move to one of Bank of Ireland's fixed rates for existing customers (see this page; choose "Existing" from the dropdown list and pick your loan-to-value (LTV) bracket)
  • Switch to another lender
If you move to one of Bank of Ireland's fixed (or variable) rates, you should assume that you will not get your tracker mortgage back in the future. If you switch to another lender, you will definitely not get your tracker mortgage back in the future.


If you want to ask whether you should fix or not (or switch to another lender), please provide the following information:
1) Existing tracker margin. (This is set in your mortgage contract.)
  • If your tracker margin is 1%, please state it in the following format to avoid confusion: ECB + 1%
2) If you have an additional mortgage on the same property, what is the rate?
  • E.g., "Fixed at 2% with three and a half years of the fixed-rate period remaining."
3) Amount outstanding on your mortgage
  • If you have both a tracker and a second mortgage on the property, specify the amount outstanding on each
4) Remaining term
5) Lender
6) Value of your home
7) Might you trade up or overpay your mortgage?
8) Do you face any barriers to switching? E.g., an impaired credit record, a mortgage with a warehoused portion due to a restructuring, reduced income since you took out your mortgage, you are now renting out the property.
9) What rates are you considering fixing at?
10) Does your house have a high BER rating which might qualify it for a lower rate? Check it here or estimate it if necessary.
11) How well could you handle a further 2% rise in the ECB rate?



Brendan,
Advice would be appreciated
1. Tracker ECB + 1.25%
2. N/A
3. Outstanding €165,000 approx
4. term remaining 20 Years. (Borrowed €255,000 for 35 years originally In 2007)
5. Lender KBC
6. Value €185,000. ( House was in negative equity to recently)
7. Have refund from tracker scandal as savings so flexibility to reduce outstanding balance
8. No barriers , dilemma is whether to fix the tracker with KBC or switch to fix ? Will I lose my tracker if I fix? I know it’s gone if I switch.
kBC advised on phoned that if I fix now , BOI will have to offer tracker back after end of fixed rate and quoted the attachment below from website. The agent said this was in the “Public Domain” and on their website. I’ve asked for this in writing. I do not trust anything over phone after last tracker scandal. Must BOI offer tracker at end of fixed rate if this is in my contract with KBC?


A7B8EF64-01D5-4633-94CC-585F3F966F6B.jpeg
Thank you.

Moderator's note: the above KBC fixed rates for tracker mortgage customers come from this webpage:
https://www.kbc.ie/mortgages/existing-customers/pdh-offe/fixed-rate-tracker
 
Last edited by a moderator:
Very interesting information.

A 1.25% tracker that you get back at the end of the fixed rate period is definitely worth something.
20 years left on your mortgage adds to the value of the tracker. For example, if you fix for 5 years, you will have 15 years left on a tracker of 1.25%

Assuming ECB rates of 2% , you will be paying 3.25% with your tracker.
Should you fix at 4% for 5 years?
ECB rates would have to rise to 2.75% to make it worthwhile.

It's very close.

The same fixed rate for a non-tracker customer is 2.5% which says something about what KBC thinks of the direction of mortgage rates.

I think that 4% is too high. But it could go either way.

Brendan
 
Another query here on KBC Tracker and whether moving to a fixed rate would be beneficial, thanks.

1) Existing tracker margin. ECB + 1.25%
2) If you have an additional mortgage on the same property, what is the rate? N/A
3) Amount outstanding on your mortgage €300K
4) Remaining term 20 years
5) Lender KBC
6) Value of your home €385,000
7) Might you trade up or overpay your mortgage? Ideally no as we are paying rent for a kid in College. But we could offset a few hundred extra a month if needed or we could bring the term down to 15 years officially.
8) Do you face any barriers to switching? E.g., an impaired credit record, a mortgage with a warehoused portion due to a restructuring, reduced income since you took out your mortgage, No
9) What rates are you considering fixing at? KBC have offered 4% for 5 years, but TSB are offering closer to 2% for 5 years,
10) Does your house have a high BER rating which might qualify it for a lower rate? Check it here or estimate it if necessary. Unlikely

We were considering moving from KBC to a provider like TSB that offers 2.55% for 5 years fixed and a 2% cash back. We would also be happy to move the term to 15 years as part of the move if that made sense (we can afford to pay another 400 a month or so on moving to fixed and shortening the term or riding out the interest rate rises and making an over payment).

Any advice appreciated.
 
@cruchan09

You definitely should not switch to ptsb. They discriminate against existing customers and in 5 years, you would just have to switch again. And you may not be able to so you would become vulnerable to their rates for existing customers.

You could fix with KBC for 5 years at 4%

That compares to the 3.25% you will be paying shortly on your tracker.
But you would get your tracker back at the end of the 5 years.

Or switch to AIB for 5 years at 2.95% and lose your tracker.

Or wait until you are sold to Bank of Ireland and fix with them. Their current 5 year rate is 3% but that will probably rise before you get your switch done.

With 20 years left and an o.k. tracker margin, I think you are probably better off staying put.
 
cruchan09 said:
a provider like TSB that offers 2.55% for 5 years fixed
Click to expand...

If you want to take the risk of switching to ptsb.
You will be paying 2.55% for 5 years. Compared to, say an average of 3.55% if you stay on your tracker - but it could go higher or lower.
So you save 1% a year for 5 years and get 2% cash back, so a total of 7%.
That would be about €21,000.

Less about €3,000 for the cost of switching to them and away from them at the end.

It's very hard to know. It's a big saving but I have seen so many people suffer at the hands of ptsb as they were unable to switch, that I find it very hard to recommend them if there is a reasonable alternative.

Brendan
 
Another query here on KBC Tracker and whether moving to a KBC fixed rate would be beneficial. Or would switching be more beneficial?

1) Existing tracker margin. ECB + 1.25%.
2) If you have an additional mortgage on the same property, what is the rate? N/A
3) Amount outstanding on your mortgage 129,000
4) Remaining term 20 years
5) Lender KBC
6) Value of your home €190,000 (minimum estimate from local estate agent selling similar properties)
7) Might you trade up or overpay your mortgage? I overpay all the time and seriously intend to continue to do so (so my remaining term is a few years less as opposed to official term)
8) Do you face any barriers to switching? E.g., an impaired credit record, a mortgage with a warehoused portion due to a restructuring, reduced income since you took out your mortgage, No. This year, I am on job share for one year, reverting to F/T in 2023. Job is rock solid.
9) What rates are you considering fixing at? Looking at KBC fixed: 2 years at 3.9%. 3 years at 3.95% or 5 years at 4% (28/11/2022: KBC verbally confirmed I can revert to tracker rate after fixed period) Don’t know much about switching to another provider.
10) Does your house have a high BER rating which might qualify it for a lower rate? or estimate it if necessary. B3.

If I go to fixed, I will shore up the extra cash and pay a lump sum off the mortgage when I exit the fixed rate.

Nervous at this, the 11th hour, going onto a fixed rate with KBC & their ability to honour reverting to the tracker at the end of the fixed period (they have confirmed that I can over the phone). KBC moves to BOI on Feb 2023. Wondering if BOI will honour reverting to tracker when the fixed period ends?

Any advice appreciated.
 
Lorgaire said:
1) Existing tracker margin. ECB + 1.25%.
Click to expand...

Lorgaire said:
9) What rates are you considering fixing at? Looking at KBC fixed: 2 years at 3.9%. 3 years at 3.95% or 5 years at 4%
Click to expand...

Let's assume the ECB rate rises to 3% from its current rate of 2%. So you will be paying 4.25%.
So you are not saving much by fixing.

Of course, rates may go up or down again. But overall, I would stay on the tracker.
 
Lorgaire said:
Nervous at this, the 11th hour, going onto a fixed rate with KBC & their ability to honour reverting to the tracker at the end of the fixed period (they have confirmed that I can over the phone). KBC moves to BOI on Feb 2023. Wondering if BOI will honour reverting to tracker when the fixed period ends?
Click to expand...

It's very clear from their website that you will get your tracker back and at the existing margin:

1669758959825.png


Lorgaire said:
If I go to fixed, I will shore up the extra cash and pay a lump sum off the mortgage when I exit the fixed rate.
Click to expand...

No need to do that. Just overpay the fixed rate as normal. There might be a penalty, but it will be a lot less than the interest saved.

Brendan
 
1) Existing tracker margin. (This is set in your mortgage contract.)
  • ECB + 1.1%
2) If you have an additional mortgage on the same property, what is the rate?
  • N/A
3) Amount outstanding on your mortgage
  • €160k
4) Remaining term: 12.5 years
5) Lender: KBC
6) Value of Property: €340000
7) Might you trade up or overpay your mortgage? Unlikely
8) Do you face any barriers to switching? E.g., an impaired credit record, a mortgage with a warehoused portion due to a restructuring, reduced income since you took out your mortgage, you are now renting out the property. No
9) What rates are you considering fixing at?
We were in the process of switching to 10 year fixed with Bank of Ireland at 3.55%. Our objectives were to bring certainty to finances over the next number of years as kids are starting college etc. We are also expecting a windfall in 8-9 years times and hope to be able to clear the mortgage balance at expiry of the fixed term. Band of Ireland have now increased their 10 year rate to 4.3% which will push our monthly repayments up from €1280 to €1340. We are wondering if this now makes switching untenable.
10) Does your house have a high BER rating which might qualify it for a lower rate?
No - C2.
 
Further to my post above, we also have the option of fixing with KBC for 3 or 5 years at 3.95% / 4% respectively and rolling back to tracker after the fixed period.
 
@Lillywhite22

Sorry, I was tied up for the last few days. Thanks for reminding me.

1) The first thing to do is to check if you are still entitled to the BoI rate of 3.55%. If so, I think you should go for it.

Assuming you don't get it...

I think that fixing with KBC for 5 years is the best option.
1674736813545.png

With a margin of 1.1% and an ECB rate likely to rise to 3% next week, and possibly, 3.5% in March, you could well be facing a rate of 4.6%

So maybe fixing for 5 years at 4% and then getting your tracker back would be better than fixing for 10 years at 4.3%?

I prefer fixing for 5 years - firstly it's cheaper, and secondly, you will not face an early repayment penalty if you clear your mortgage after 8 years.

If you do choose this option, do it today. Don't delay as KBC may withdraw or increase these rates at any time.

Brendan
 
Hi Brendan,

Many thanks for that response which is very helpful. We have lost our on the 3.55% rate with BoI - so I think you're right that the KBC 5 year is the best option. My only concern is that BoI will play silly beggars with the tracker margin - even if it's confirmed in writing from KBC.
 
Lillywhite22 said:
My only concern is that BoI will play silly beggars with the tracker margin - even if it's confirmed in writing from KBC.
Click to expand...

Very unlikely. The banks have learned to be very careful about trackers.

Keep copies of the paperwork.

And make sure to take copies of the website information and other stuff around the fixing in case you need it.



Brendan
 
1) Existing tracker margin. ECB + 1.35%
2) If you have an additional mortgage on the same property, what is the rate?
N/A
3) Amount outstanding on your mortgage
€63,000
4) 21 Years
5) KBC
6) €200,000
7) Might you trade up or overpay your mortgage? No
8) Do you face any barriers to switching? Impaired credit record
9) What rates are you considering fixing at? 5 years at 4%
10) Does your house have a high BER rating which might qualify it for a lower rate? No, C2

Thanks in advance for advice.
 
@Paddy1981

ECB rates will move to 3% this week and possibly 3.5% after that. So with a margin of 1.35%, your rate will go to 4.85%

They might go up or down after that. No one knows. But let's say that they remain stable at 4.85%, you will save 0.85% for 5 years.

Then you go back to your tracker.

Very hard to know. But, on balance, fixing for 5 years is probably right given that you will not be overpaying your mortgage.

Brendan
 
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