KBC should take the 50k capital payment off whichever portion was most beneficial to you.
Agree here with one exception - if you had a portion of the mortgage fixed at the point in time the over payment was made, then the over payment could not come off the fixed portion but the variable portion. When the over payment was made, had you any portion of this fixed or was it a combination of variable and tracker?
Got confirmation today of rate rectification. My mortgage was split 1/3 tracker and 2/3 fixed in March 2008 (drawdown 2005). They are giving me tracker for the 1/3rd but not on the remainder. However the big problem is that we made a 50k capital payment 3 years ago off the mortgage and kbc took that off the 1/3 amount meaning that balance now on a tracker is very small and the much larger balance remains on the higher rate . We didn't specify at the time which portion of the loan the capital payment should come off. Anyone think I have a case to have the higher portion deducted by the 50k thus meaning I get the benefit of the tracker on a larger portion ?
Absolutely you have a case. The over-payment should have been done either
- (conservatively) 1/3rd off tracker, remainder off variable
- (fairly) full off variable
*assumes nothing is fixed when the over payment was made*
I don't understand the fact they are giving you a tracker on 1/3rd? Was this not always on a tracker, as you only fixed 2/3rds? Surely they should be giving you back the tracker on the part you fixed and the original tracker would remain as a tracker all the time. Maybe you can clarify this as well as whether anything was fixed at the time the over payment was made.
I also think that if at the time the over payment was made you were 1/3rd tracker and 2/3rd's variable, you also have an argument for getting your money back if you needed it now. It could easily be argued that in the event you were 100% tracker at the time you would have been unlikely to have made the mortgage over payment as it would not have been as financially advantageous for you to do so. At the time its likely that deposit rates were in excess of tracker rates, but not variable rates ! This is also worth thinking about depending on your current circumstances.