Thinking about KBC LTV 50-60% 3 year fixed

[Leinstor]

I'm currently on a KBC LTV 60-80% variable at 3.69% mortgage and have got the property revalued which puts me in the 50-60% range. Is it correct that I am still paying 3.69% when their current LTV Variable rate for 60-80% is 3.10%?

I would have expected that my rate would have reduced as their variable rate reduced and not stay at what the "variable rate" was when I signed up. Could I be due a refund?

I'm reluctant to now sign up to a 50-60% 3 year fixed at 2.95% when I am unsure what rate I will be coming out to.

 

[Concrete]

To immediately drop to a lower variable rate, without even needing to fix, you need to take a look at the following on the kbc site (sorry - not allowed create links on AAM yet - I'm too new here):
Go to kbc.ie and then "Our products"-"Existing Customers"-"Existing Customer Rate Offer"
There are some conditions such as you can't be in arrears and it can't be a buy to let but apart from that, as I understand it, you should be able to follow the simple process on that page (including a valuation which will cost about €130 but is well worth it to drop to a lower mortgage rate) and drop to 3.25% (or 3.05% if you've a current account with them).
KBC won't automatically drop you to lower rates - you have to go through their process.
There's more discussion on this on AAM if you search for "current kbc customer offer" within the Switcher's Forum (again - sorry - I'm not allowed include links here yet).

 

[Leinstor]

Thanks for the reply. I had a look at the switchers forum. I've already paid the €127 and have received my report back. I'm just wondering now if it's possible to be transferred directly to the variable rate after I fix for a few years or do I need to contact them once the fixed period is over and ask to be put on variable.

The current variable rate is 3.10% for 60 - 80 LTV, but it looks like my rate never dropped to that and just stayed at what the Variable LTV rate was when I signed up (namely 3.69%)

Surely if it's variable, I should now be paying 3.10% too?

 

[Concrete]

At the end of the fixed period, you'll drop to a variable rate. From their site:"At the end of your fixed rate period you will roll off on to a new business LTV variable roll off interest rate, as illustrated above. The applicable roll off rate is determined by Loan to Value at initial drawdown." So, I think you'll have to get another valuation done at that point and fill in their form at that time to get the most beneficial LTV rate.

As I say, they don't move you automatically to lower rates - you have to send them the valuation, along with filling in their form (I think you need to go through this every time you move to a different rate band or they change their rate), otherwise they just keep you on the rate you started on with them. I think that other thread I referred to discusses that (and the way that if a KBC customer doesn't actively watch what's going on, they lose out). I think it works differently with some other banks but KBC are who I've been with longest, so understand best.

 

[skrooge]

I'm reluctant to now sign up to a 50-60% 3 year fixed at 2.95% when I am unsure what rate I will be coming out to.

roll off rates are posted on https://www.kbc.ie/our-products/mortgages/our-mortgage-rates

I presume the website is worded poorly:
"The applicable roll off rate is determined by Loan to Value at initial drawdown" I take that to really mean your last valuation (as for many the time of drawdown was the last valuation date) but I'm open to correction. Based on the link the current role off rate for your current LTV is 3.25%. Of course who is to know where variable rates will be in in 3 years.

Perhaps your best bet is to switch to the lower LTV variable rate then the next day switch to the the fixed rate. Whatever approach you take you would seem better off fixing given the rate differential (assuming you dont want to overpay by more than 10% in the next 3 years)

 

[gnf_ireland]

I would have expected that my rate would have reduced as their variable rate reduced and not stay at what the "variable rate" was when I signed up. Could I be due a refund?

The current variable rate is 3.10% for 60 - 80 LTV, but it looks like my rate never dropped to that and just stayed at what the Variable LTV rate was when I signed up (namely 3.69%)

This is not the way KBC work for some bizarre reason. They have this concept of New v Existing customer rates and use this to artificially differentiate between variable rate customers.
The changes of a refund are exceptionally low. I went through a long complaints process on this with very little joy (my complaint was also based on misinformation at the time I signed up), and know someone who went to the FSO and lost the case in adjudication.

Also note that KBC have covered themselves in their Standard Variable Rate policy statement by saying that date of drawdown is a factor in the determination of the variable rate you are on.

KBC won't automatically drop you to lower rates - you have to go through their process.

Also note that while the Existing Customer Offer is still valid, it can be withdrawn at any time by KBC.

"At the end of your fixed rate period you will roll off on to a new business LTV variable roll off interest rate, as illustrated above. The applicable roll off rate is determined by Loan to Value at initial drawdown."

I had this checked with KBC and would advise you to do the same. The rate you will roll off onto is their new business rate for the LTV done at the time of the latest valuation - rather than initial drawdown. So if your LTV is now 55%, then the rate you roll over to is whatever rate a new customer could avail of with a LTV of 55%

So, I think you'll have to get another valuation done at that point and fill in their form at that time to get the most beneficial LTV rate.

Yes, this may be the case if (a) the LTV has changed - prices may drop etc and (b) the Existing Customer Offer is still available to customers. There is no guarantee of either (obviously)

Perhaps your best bet is to switch to the lower LTV variable rate then the next day switch to the the fixed rate. Whatever approach you take you would seem better off fixing given the rate differential (assuming you dont want to overpay by more than 10% in the next 3 years)

Going onto a variable rate prior to fixing would make no difference. You may as well go straight to the fixed rate from the outset. The fixed rates are better assuming you dont want to overpay by 10% or more.
Note, if you have the valuation done already - you might want to consider going for the 10 year fixed at 2.95%. It goes up from 3rd April, giving you two weeks to get it completed - might just be possible, although tight given the holidays in the intervening period