KBC allows mortgage holders to redraw overpayments - is this still available?

Thanks Brendan - makes sense on the ltv

Would the term of the loan or the monthly payment be altered by the overpayment?
 
letitroll said:
Would the term of the loan or the monthly payment be altered by the overpayment?
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@letitroll the answer to your question is in the original post I made on the issue. I even quoted the letter from KBC

gnf_ireland said:
"The extra amount is deducted from your capital balance and will result in an interest saving for you. Please note: the term of your mortgage will not be reduced with this method of overpayment.
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There are options with KBC to reduce the term of your loan if you wish to avail of them, in particular for regular overpayments. However I have always elected to maintain the term of the loan with any I have selected and reduced the amount. That said I continue to overpay, so will have the same net effect in reality
 
EBS allow this facility also, or at least they did last time I checked (in approx. 2012). However I've not seen it written down anywhere. When I took out my SVR mortgage with EBS in 2007 the manager in Baggot Street mentioned verbally that any overpayments to the account would be used to reduce the interest charged but would not be applied to reduce the capital until I specifically requested it. She expressly stated that I could therefore withdraw the overpaid amounts if I wished, as long as I had not applied it against the capital.

It's not a facility I've used though.
 
But the kbc facility allows the overpayment to come off capital, not just interest, and then be redrawn back down if necessary.
 
This is a very nice feature; given that I plan to overpay fairly aggressively, but will also be keeping some savings around, just in case, I'm half regretting not going with KBC now, though I don't like their policy of not applying rate reductions to existing customers (I'm sure they'll be more than happy to apply rate increases when the time comes...)

Are there any limits on this policy? Is it actually in the mortgage agreement, or just something they do out of goodwill?
 
One other Q on this as can't seem to find a mortgage calculator online that can model the effect of this. If anyone has a link to one it would be great.

Lets say my outstanding loan with KBC is 250k with 25yrs left to run @ 3.4% (<50% LTV) - meaning a monthly payment of 1238.19euro

I come into 230k and decide to overpay KBC 230k on the loan - leaving a capital balance of 20k. The term of the mortgage isn't reduced, as per the above, therefore the payments are reduced would the result look like this:

20k balance (250k - 230k overpayment) @ 3.4% over 25yrs = 99.06 p/m for 25yrs?

The benefit being then that at any point I could ask KBC for the full 230k to be returned to me if needed?
 
@letitroll to be fair you are at the extreme in terms of overpayment here, so I think it would be wise to contact KBC directly and ask them to confirm their policies to you in writing. I am sure there are some restrictions on this, that would push the overpayment into coming off the term rather than the amount at some point.

I paid over 30% of the mortgage amount off in lump sum overpayments within 4 months of taking it out and that was not an issue. None of this came off the term. You are proposing to overpay by 92%, which is a different ball game

Strongly recommend you discuss with KBC and get in writing, as I imagine you want to maintain access to the 230k and if it backfires on you, you would not be happy !
 
@gnf_ireland thanks! Agree I would need lock tight confirmation on the policy from them.

However my view would be that the terms & conditions of the over-payment, regardless of the over-payment amount (as long as below capital amount), should still stand. Unless of course there is some sneaky T&C's somewhere
 
@letitroll I have never been able to find the T&C's on this feature. I have only been able to see what was returned to me on the letter when I made the initial overpayment

As we all know, mortgage contracts are weighted heavily in favour of the bank, and I have found no reference to this 'policy' in my mortgage agreement. You may well take the stance above, but would be interested to know how you plan to get this confirmed in your mortgage agreement with KBC. Please do keep us updated on your efforts
 
In checking this with two separate KBC phone reps they now say that the redraw facility is something they USED to provide to customers but going forward it will not be available for new mortgage business

Disappointing and would make you wonder how long they might facilitate this for existing customers if it isn't stated in their T&C's. Something to bear in mind for those thinking about overpaying on an existing mortgage
 
letitroll said:
In checking this with two separate KBC phone reps they now say that the redraw facility is something they USED to provide to customers but going forward it will not be available for new mortgage business

Disappointing and would make you wonder how long they might facilitate this for existing customers if it isn't stated in their T&C's. Something to bear in mind for those thinking about overpaying on an existing mortgage
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Thanks for posting this. This puts kbc way down the list for me.
 
todo said:
Thanks for posting this. This puts kbc way down the list for me.
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Indeed and something new entrants to the mortgage market (The Frank Mortgage etc.) should consider adding as a feature of their product................cash back deals are old hat and you would hope don't fool many!
 
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Has anyone checked if this is in the mortgage offer currently being made? I would prefer to rely on the wording of the contract rather than on the word of a call centre
 
Was reading through the whole thread, delighted to see a kind of offset mortgage! Pity they seem to be doing away with it!
 
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I phoned KBC and they are not longer allowing to redraw overpayment. I got my mortgage with them in 2014. Their 'flexible repayment' form still states that they allow to redraw overpayment, but it's not really the case according to what they said over the phone.

Interestingly the bank account to make a lump sum overpayment is a Ulster Bank account. I suppose they're paving the way to get acquired by UB later this year.
 
Cilar said:
I phoned KBC and they are not longer allowing to redraw overpayment. I got my mortgage with them in 2014. Their 'flexible repayment' form still states that they allow to redraw overpayment, but it's not really the case according to what they said over the phone.

Interestingly the bank account to make a lump sum overpayment is a Ulster Bank account. I suppose they're paving the way to get acquired by UB later this year.
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I just received mortgage approval from KBC during the week and also asked them by email if I could redraw over payments, they said 'any over payments would not be able to redrawn at a later date'......Cilar, is it definite that Ulster Bank plan to acquire KBC this year?
 
I have recently switched my mortgage to KBC. I set up a standing order to make a monthly over-payment. A few days after each payment I received a letter from KBC telling me my monthly repayment would reduce by a few euro. I rang and they told be that the term was fixed and they were reducing the repayment to match the term. She explained that I would need to fill in a Flexible Repayment Instruction form requesting a fixed monthly amount. I got the form today, on this form it clearly states that over-payment can be redraw at a later date.
 
Rob F said:
I have recently switched my mortgage to KBC. I set up a standing order to make a monthly over-payment. A few days after each payment I received a letter from KBC telling me my monthly repayment would reduce by a few euro. I rang and they told be that the term was fixed and they were reducing the repayment to match the term. She explained that I would need to fill in a Flexible Repayment Instruction form requesting a fixed monthly amount. I got the form today, on this form it clearly states that over-payment can be redraw at a later date.
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It's still indicated on their form, but it is actually not available. See a few post above. I got the same form, and when querying them on the "term and conditions" attached to this, they mentioned that the redraw facility was not longer available.
 
Would somebody be kind enough to post the exact wording from the form?

It's hard to imagine that a redraw entitlement contained within the form does not constitute a contractual agreement, which makes anything said by an individual employee of KBC, frankly, irrelevant.
 
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