Switching to KBC should I now?

O

one8seven

Registered User
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I am right in the middle of switching to Kbc. I was going to do 80% of my mortgage fixed for 2 years and 20% variable, the term being for 20 years. I chose the 20% variable as I tend to pay off large amounts from time to time.
I was going to reassess my situation in 2 years time and possibly move then if it made sense to do so only. Kbc seemed to be the best to move to prior to today, I am unsure now what to do now though. Any thoughts from the experts on here?
 
If the deal still makes sense for you, then go ahead.

If the homeloan is sold to Bank of Ireland, they'll have to honour the contractual terms.
 
MrEarl said:
If the deal still makes sense for you, then go ahead.

If the homeloan is sold to Bank of Ireland, they'll have to honour the contractual terms.
Click to expand...
Hi Earl what I was afraid of was the 20% variable element of it as BOI are one of the highest rates and also perhaps not being able to switch in two years time after the fixed expired for any given reason. After researching into things a little I can reduce the variable to 10% as I can pay back 10% of the fixed early to KBC without any fees.
Its still a hard decision with everything up in the air at the moment, maybe it will be worth the risk as you suggest. Thanks for the feedback.
 
It's a balancing act between locking in the best rates available now, ensuring flexibility too clear the mortgage sooner rather than later while also protecting yourself against potential rate increases.

The BOI angle is a variation on when will rates rise in the future.


How certain are you that you will be able to over pay in the future?


If you're unsure if will happen why not fix the whole lot and take your chances with break fees. Keeping a portion it variable is costing you anywhere between 0.7%-1% on that portion - depending on your LTV.

If it's more or less guaranteed might you be better off splitting your mortgage across fixed rate buckets. For example fixing 10% for 1 year rather than keeping it variable would save you anywhere between .5%-.8% on that portion and you would have the flexibility to overpay it at the end of year 1 and still have the flexibility to overpay 10% of the remaining balance without a break fee.

If you're really concerned about the BOI effect why not take advantage of the various fixed rate buckets. The soon would be to have it set up so whatever rolled off a fixed would be equivalent to what you know you will have in spare funds.
 
If the BoI deal goes ahead, it'll probably take a year, maybe more, to complete... So you'll be half way through the two year fixed period.

That said, if it were me, I would be looking at longer term fixed rate deals now - as less competition will surely lead to higher interest rates, in the years to come.

I assume that you've looked at longer term offers from other lenders, such as Avantcard etc.
 
skrooge said:
It's a balancing act between locking in the best rates available now, ensuring flexibility too clear the mortgage sooner rather than later while also protecting yourself against potential rate increases.

The BOI angle is a variation on when will rates rise in the future.


How certain are you that you will be able to over pay in the future?


If you're unsure if will happen why not fix the whole lot and take your chances with break fees. Keeping a portion it variable is costing you anywhere between 0.7%-1% on that portion - depending on your LTV.

If it's more or less guaranteed might you be better off splitting your mortgage across fixed rate buckets. For example fixing 10% for 1 year rather than keeping it variable would save you anywhere between .5%-.8% on that portion and you would have the flexibility to overpay it at the end of year 1 and still have the flexibility to overpay 10% of the remaining balance without a break fee.

If you're really concerned about the BOI effect why not take advantage of the various fixed rate buckets. The soon would be to have it set up so whatever rolled off a fixed would be equivalent to what you know you will have in spare funds.
Click to expand...
That sounds great, thanks for that I had not thought of doing things that way.

I am 100% sure I will be paying back extra, as I have been paying back around 12K extra per year.

Are you saying I could have say two different fixed rates say a 1 year and a 3 year? Perhaps a small variable as well, is that possible? 3 different rates would be even better than two...

I think you are right about two fixed if that is possible it sounds great.
 
In light of The KBC/BOI situation, I had decided to change the fixed term to 3 years and a 83% and 17% split where I planned on using the last 10% in the final year.
Your right by spliting it in 3 I do calculate a gain but looking over the figures its hardly worth while.
 
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