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

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
 
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
 
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.
 
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.
 
To be fair the "Flexible Repayment Instruction" actually states:

The funds will be available to redraw at a later date subject to KBC Homeloans Terms and Conditions.
 
Well, are there any restrictions on the availabity of the redraw facility in the KBC Homeloans Terms and Conditions?
 
hi all,

I rang KBC there (for another matter) and asked for clarifications on this. Seemingly anyone who has drawn down their mortgage since 2013 is not available to use this facility. I queried the content of some of the letters I have been issued, and was given the opportunity to redraw all overpayments to date, but would not be allowed to redraw any more overpayments made.

I have asked for a complaint to be raised on this for processing - since I have clear letters stating draw was possible (without any caveats). We will see what the outcome of this is, but given KBC's track record of treating existing customers I would not be hopeful.

However, looks like the main benefit for me to remain with KBC is now gone, so time to start looking elsewhere.
 
gnf,
Is it just the monthly overpayments that you can't redraw? Presumably, you can still redraw the deposit amount(s) that you have lodged against your capital?
 
@tereyk to be honest I understand any overpayments made now are not available for redraw, whether they are once off or regular payments

I have asked for a formal complaint to be raised - so will see what comes from that, but for the moment I am assuming any further overpayments made are not available for redraw. We are likely to have a dispute on the older stuff, but will see what happens next
 
I drew down a mortgage with kbc 13 months ago and have overpaid a significant amount on that mortgage on the basis of the advice I received from the Bank which was that I could overpay and if I wanted could redraw the overpaid amount in the future. So it made absolute sense for me to overpay as much as I could.

I found out last week when I phoned the bank also to query something else that this was a mistake and that whilst I could redraw back down the overpaid sum I could no longer continue this facility and in fact I should not have been allowed in the 1st instance.

I was advised many times by phone that I could do this because I did question it with them when the question was previously raised in this forum. So they messed up here.

I will need to redraw my funds back down but am disappointed that this facility is no longer available as I very much valued it!

What, if anything, should be my next step (other than redraw my money which I need to do)?
 
As a follow-up on this one, I had a response to my formal complaint from KBC. The summary is:

1. Regular Overpayments made via Flexible Repayment Instruction are still available for re-draw as per the confirmation letter from KBC. I have this in writing so it is clear enough. I had been incorrectly advised this was not available for re-draw

2. Lump Sum overpayments made are NOT available for redraw, and this facility was removed for any customers taking out mortgages after September 2013. I don't have any written record on these ones, but have asked for them to review the phone records for July 2015 to confirm my understanding I was informed that the funds would be available for redraw.

Either way, from my point of view, the principle benefit of being with KBC is now gone, so its now a matter of assessing what to do next. I really valued the redraw option personally, but at least I found out before I made another lump sum overpayment
 
Hi GNF,

what does your first point mean? is it that if you overpay your monthly repayment you can redraw that back down? if so, could you overpay by any amount and if so does this not mean the facility is effectively still there?
 
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