Home Mortgage loan KBC mortgage holders could face higher repayments from BoI deal

KBC mortgage holders could face higher repayments from BoI deal


KBC Bank mortgage holders have been warned that they may face higher interest rates and higher repayments when their loans are transferred to the Bank of Ireland.

The Belgian lender leaves the Irish market and sells its credit assets and deposits to Bank of Ireland for 5 billion euros.

Last month, the two banks announced that they had reached a binding agreement for KBC’s sound mortgage portfolio worth € 8.8 billion as well as € 4.4 billion in deposits. .

Some 40,000 KBC mortgage creditors will have their loans transferred to the Bank of Ireland if the transaction is sanctioned by the competition authority.

Financial broker MyMortgages.ie is warning holders of KBC fixed rate contracts that they could see their repayments increase by thousands of euros if they adopt Bank of Ireland rates after their current fixed rate term expires.

They also inform holders of KBC variable rate mortgages that their new lender will be free to increase their variable rate at any time.

He informed mortgage holders that they could avoid these increases by shopping in the market and possibly switching lenders, realizing average savings of € 2,000 or more, over a three-year period.

“When KBC first announced its intention to exit the market, we received a series of calls from concerned fixed rate mortgage holders concerned about what the sale would mean to them,” said Joey Sheahan, credit manager at MyMortgages.ie.

“We assured them that consumer protection laws mean that their current deal will have to be honored by the Bank of Ireland, but once their fixed rate term ends they could face interest rates and much higher repayments if they stay with Bank of Ireland – which is not currently the most competitive lender in the market, ”he said.

“Those with variable rates are in a more precarious position as the Bank of Ireland is free to raise their rate as soon as they move and, although that may change, the BoI currently offers some of the highest SVRs in the world. market, ”he said. .

“What we are saying to people is that they should really take this opportunity to do a full review of their mortgage with a view to moving to the most beneficial provider,” said Mr. Sheahan.