It appears from another thread, that KBC, and other banks, may want people to set their overpayments against the active mortgage rather than the repayment-free warehouse.
This is consistent with reports of lenders not actively reviewing split mortgages and asking the borrowers to move some of the warehouse into the active mortgage.
The underlying issue probably is that the bank has restructured the loan so that the active part qualifies as a performing loan for Central Bank purposes and if they move some of the warehouse into the active part and the borrower defaults, then the whole loan would be classified as non-performing.
From the other thread:
I spoke to KBC. In summary...
1) You have a contractual right to exit your split mortgage at any time.
2) They have to make sure that you fully understand the implications so they send you a letter recommending that you get independent financial advice and they ask you to sign a letter saying that you understand the implications.
I thought that banks would set any overpayments against the warehouse, but in fact, the banks generally seem to be allocating any overpayments against the active mortgage - which, of course, is much better for the customer.
In their experience, people want to get rid of the warehouse for the wrong reasons. People say "I don't want to reach 70 and find myself still with a mortgage hanging over me."
KBC explains that even still it makes sense to clear the interest-bearing part first. If you overpay that, it will be cleared well before the person reaches 70. And then they can start clearing down the warehoused part.
The last thing KBC wants, for themselves and for the borrower, is for a borrower to exit the split mortgage, only to be surprised by the increased repayments and then to fall into arrears again.
But if you choose to exit the split mortgage, KBC has no choice but to comply with your choice.
Brendan