KBC KBC basing cohorts on Application date rather than Draw-down dates

[unfortunate]

Could be wrong here but when calculating s break fund cost from fixed rate don't the bank use "prevailing"rate at beginning of fixed period as part of the calculation. Its the use of the word prevailing is the question. Why not use SVR especially if this was an available product. All institutions were using the term SVR in early 2000's so it was ambiguous wording and could be interpreted anyway really. But get exactly what you're saying. Devils advocate is needed.

 

[peemac]

Could be wrong here but when calculating s break fund cost from fixed rate don't the bank use "prevailing"rate at beginning of fixed period as part of the calculation. Its the use of the word prevailing is the question. Why not use SVR especially if this was an available product. All institutions were using the term SVR in early 2000's so it was ambiguous wording and could be interpreted anyway really. But get exactly what you're saying. Devils advocate is needed.

It does, but the way it ii written is not good for your argument.

"If at the redemption or switching date the wholesale rate prevailing is higher than the wholesale rate at drawdown no break funding fee arrises"

I don't think there's an argument to be had on the word "prevailing".

 

[unfortunate]

Last post deleted. My apologies for offence caused. But sentiment stands. Top table not willing to stop eating from pot and fix problems

 

[peemac]

Last post deleted. My apologies for offence caused. But sentiment stands. Top table not willing to stop eating from pot and fix problems

I think you are more annoyed at yourself, but sometimes you have to accept defeat.

From your first post this is your mortgage detail

"Drew down Oct 2005 fixed for 2 years. Loan offer says revert to lenders prevailing variable rate but no special conditions. Fixed again 2007 for one year and then 2008 for five each time saying rolling to standard variable rate no offer to go to original rate whatever it was."

Your mortgage was 2005 (applied for and drewdown) - so totally out of scope of the flyer. You choose fixed initially, so nothing in your agreement gives any indication of a percentage above any form of ecb rate and states that it goes on to standard variable rate.

Back then it would not be seen as anything major as the standard variable rates of most banks were not far off their tracker rates. So neither the broker nor the bank tried in anyway to hoodwink you and I just cannot see any angle that you can follow that would have any chance of success.

KBC and other banks certainly took the proverbial by charging excessively high variable rates from 2009 to present, but unless there was something in the contract such as the danske "cost of funds" (something like that), there's little you can do.

 

[unfortunate]

Yeah I know. But bank are still playing silly buggers with communications. Can't say what as its up my sleeve. But its the kind of thing that just keeps me scraping.

 

[GTracker]

What if you were forced to take 3 yr fixed after asking for a tracker ??

 

[Daisy duke]

What if you were forced to take 3 yr fixed after asking for a tracker ??

What are your timelines, sound similar to mine? My application was for a capped tracker, but underwriting insisted on the 3 yr fixed. My dates are Oct 06, 10 days pre flyer!

 

[gnf_ireland]

I don't think there's an argument to be had on the word "prevailing".

On the "prevailing variable rate" versus SVR - if I had fixed for 10 years in 2007 (for example) and came off that fixed rate last year, I would not agree with any bank that SVR is the prevailing variable rate. I would argue it is the LTV variable rate that they are promoting now. There may be a debate over whether it should be the LTV calculation from the date we drewdown the mortgage or the LTV calculation from the date of expiry, but I would strongly argue it is not SVR. My point here being SVR is not always the "prevailing variable rate".

Similarly, if I fixed for 2 years in 2004 and had the same clause, I would expect that the tracker rate from 2006 is the prevailing variable rate at the time and not SVR.

The key is the word variable rather than the word prevailing, and the term variable rate is defined in the homeloan agreement (I would imagine)

 

[gnf_ireland]

Why not use SVR especially if this was an available product. All institutions were using the term SVR in early 2000's

The same could be said about tracker ? Why not say the "prevailing tracker rate" as it was a pre-existing product


Lets say you manage to convince the FSO/CB/court that the wording is sufficiently ambigious and you could have legimately have read the wording as you were entitled to a tracker, then you have to convince them of the next steps including:

1. What should the tracker rate be? If you had a legitimate expectation of for a certain % above ECB, that would need to be written into the contract. I think you will find that anyone who fixed in say 2003 and matured in 2006 would have been offered the market tracker rate in 2006. If there was no available tracker when your fixed period ended, what rate should you go on?

2. The bigger challenge I think you will have is to show that you genuinely read and analysed the mortgage contact to the extent that that clause influenced your decision to go with KBC on the basis you were going to roll over onto a tracker - but you never once queried the wording of the clause prior to drawdown. If the issue was material for you at the time, and you did not understand it properly, why did you never ask for clarification on it?

3. Can you genuinely say that if you knew at the time you would move onto a non-tracker variable rate would you have walked away from KBC and gone to another bank? How can you prove this statement? As many have said the gap between variable rate and tracker was not material at the time, so its a very hard statement to prove. No one had a crystal ball to see where interest rates were going to go

 

[gnf_ireland]

What if you were forced to take 3 yr fixed after asking for a tracker ??

Define what you mean by forced to fix ? Did something put a gun to your head or did you make the decision?
What things were said that forced you to take the fixed rate? Did they tell you you would not get a tracker? Did they tell you that they were going to stress-test you to 3% above tracker rate, but not if you took the fixed rate?

I think you need to be clear between not being offered a tracker, being offered a tracker but recommended to go fixed and being forced to go fixed. Only you can answer those questions

Note: I was refused a tracker when I applied for my mortgage in 2010. Doubt I have any comeback though, as I signed up for a fixed rate at the time and no reference to tracker in my mortgage agreement

 

[Wonder]

@peemac if u had a variable rate in 2006 that the rate changed because the ECB changed their rates what would u call that variable.... Svr or tracker interested in ur view on this.

 

[Johnc6]

Hi, I reread the IIB mortgage booklet that I was given in 2005 when applying. Among other things it states that they had 3 rates at that time, Fixed, Variable (not SVR) and Tracker. On the tracker explanation, it states that it is a Variable rate product and tracks the ECB rate etc.

Now in my case Nov 2005 I took out a fixed for 2 years initially rolling on to Lenders Prevailing variable rate. Close to expiry of the fixed period, I was sent letter stating fixed period ending this is your variable or fixed rate options. However, a few days later I received a letter from KBC saying they had put me on SVR and that my new rate was x% SVR. I called and arranged a lower 1 year fixed rate at that time as that was the best option they offered me.

KBC did mention the IIB mortgage booklet during the finance committee meeting on Tuesday and they also stated that where there was/is confusion or vagueness with the contract/booklet they would tend to favour the customer.

So, in my case I was due to roll on to the Lenders Prevailing Rate, they had 2 variable rates as per their own booklet, variable and Tracker, so why was I put on SVR which was not mentioned in the booklet?

 

[gnf_ireland]

@Wonder I know you are not asking me the question, but the difference between a variable and tracker is a tracker HAS to move with ECB and is a fixed % above the ECB rate. A variable can move based on how the bank sees fit. Historically (2004-2006 in particular) the non-tracker variable rates moved generally in line with ECB, but this relationship broke in 2008/09 onwards.
A tracker is a contractual commitment to track the ECB rate + agreed margin.

 

[gnf_ireland]

On the tracker explanation, it states that it is a Variable rate product and tracks the ECB rate

The KBC documentation still says this when I moved to them in 2015

So, in my case I was due to roll on to the Lenders Prevailing Rate, they had 2 variable rates as per their own booklet, variable and Tracker, so why was I put on SVR which was not mentioned in the booklet?

But if their tracker rates are no longer available, then surely the banks prevailing variable rate is the SVR rate.
The SVR rate is just another variable rate, similar to the LTV variable rate and any other sub-category of variable rate they come up with.

What variable rates did KBC offer in November 2007? If the only one available is SVR, then this is the variable rate applicable in November 2007. If you believe you should have got the variable rate applicable from November 2005, then why were you not asked to select between tracker and variable at that stage?

When I signed up to KBC in 2015, they define 3 rates types - fixed, tracker and variable. There is no reference made to SVR, LTV or any other sub-categories of variable rates, as they all work the same way as the variable rate definition. The tracker rate is defined as against an external value, such as ECB or EUIBOR etc.


When I came off fixed term with BOI in 2013 they moved me onto a variable rate called 'VRP15'. They had a VRP5 variable rate product as well. They are both variable rate products and no different to SVR. The banks are unlikely to have a single 'variable rate' and therefore have to have some way of seperating them to customers. The variable rate for BTL is no doubt different to PPR etc.

 

[Wonder]

@peemac I am asking u this question is a variable rate that moves in line with the ECB rate a SVR rate or a tracker variable. The rate was in line with ecb .25....

 

[gnf_ireland]

My application was for a capped tracker, but underwriting insisted on the 3 yr fixed.

I think you need to be clear between not being offered a tracker, being offered a tracker but recommended to go fixed and being forced to go fixed. Only you can answer those questions

Hi Daisy - my reading of this is KBC did not want to offer you a tracker in 2006 for whatever reason. You fall into category a in my list above. The reasons for this is only known to you. On this alone I would be doubtful you have a case, as you decided to move forward knowing you were only being offered a fixed rate and not a tracker. You clearly were not being offered a tracker.

My dates are Oct 06, 10 days pre flyer!

I assume your date of application is before the flyer date, but what about date of Letter of Offer and when you signed it? I assume date of drawdown is after the flyer date. I think the key dates are when they issued the offer and when you signed it and if you had access to the information in the flyer in the window. Applying for a mortgage does not mean you would sign it, especially if what you asked for was not what you were offered? When did KBC inform you it was being 'moved' to a fixed rate ? What was the exact date of this?
I would suggest getting these exact dates and see how they look in the 'personal story'.

 

[gnf_ireland]

@peemac I am asking u this question is a variable rate that moves in line with that ECB rate a SVR rate or a tracker variable. The rate was in line with ecb .25....

Again, I know you are not asking me, but you appear to have answered by response

a variable rate that has a written commitment to track the ECB by a certain margin is a tracker
a variable rate that the bank happens to move in line with ECB rate changes, but has no written commitment to track the ECB by a certain margin is not a tracker. It could be SVR, LTV etc
Both are variable rates - but one is a tracker and one is not.

I was on VRP15 with BOI in 2013 - the rate was 4.35%. SVR was 4.5%. I was not on SVR and was not on a tracker but some other variable rate. There are variable rates other than SVR. My current rate with KBC is LTV>50% - its still a variable rate but not SVR

 

[Johnc6]

But if their tracker rates are no longer available, then surely the banks prevailing variable rate is the SVR rate.
The SVR rate is just another variable rate, similar to the LTV variable rate and any other sub-category of variable rate they come up with.

That is my point, the tracker rate was available, the Variable product as described in the booklet was superseded by the SVR, so the only prevailing variable rate that referenced the booklet was the tracker.

 

[unfortunate]

I'm really just after a reason as to why SVR wasn't used but word prevailing was used. There is a reason but no one will explain it or can explain it. The bank surely knows why this was used in contracts. They wouldn't deal with it at finance committee Tues evening either. And that's the ambiguity of everything no explanation of substance

 

[gnf_ireland]

That is my point, the tracker rate was available

Ok - lots of dates been thrown around here

the Variable product as described in the booklet was superseded by the SVR

No it was not superseded by the SVR. The SVR is just an instance of the variable rate defined in the booklet.
This is no different to LTV rate, MVR (Managed Variable Rate) or any other marketting term used to define the current variable rate offered to customers. SVR does not supercede variable rate - it is a variable rate

the only prevailing variable rate that referenced the booklet was the tracker.

So if trackers were commercially available in November 2007 by KBC, did you ask them for a tracker rate when you discussed the rollover with them? What did they say to you? What was your response? Did you put it in writing? Did you raise a formal complaint with KBC?
From the sounds of it you were refused a tracker in November 2007


The booklet is a generic booklet issued to all mortgages. It takes about generic products and rates. What does your HOME LOAN agreement say? Does it say "prevailing variable rate" or something different?
I fully accept that a tracker rate is a variable rate. However, I also contend so too is a LTV rate, managed variable rate and standard variable rate.


I appreciate your frustration here, but I can honestly say that based on my dealings with KBC on other matters, you will need a much stronger case with a lot more hard facts to convince them to move in your favour. I would guess the same for the FSO and CB also. I am not saying it cannot be done - but the current argument is not solid enough in my personal view and needs much more work.