Warehouse mortgage activated interest rate at 0%

G

Gwenbc

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AGE : 42

Spouse Partners Age:43

Annual Gross income of employment: 20,000
Annual Gross Income Spouse: 35,000

Expenditure Pattern: Both generally savers

Rough Estimate of Value of home: 300,000

Mortgage Provider: KBC Bank

Mortgage balance : €82,000

Type of Mortgage: Fixed
Interest Rate:0%

Other Borrowings:Car Loan €270 per month

Savings and investments:20,000 savings

Do you have a pension scheme: Yes
6% weekly and 6% employer
Spouse 20% employer 6%

Age of Children:11 yrs old

Life Insurance:Yes

What specific question do you want:
We had a split mortgage with KBC and have recently cleared the preforming part of it,we are now paying the warehouse part which is at 0% which doesn't seem right but I have received a letter and have spoken to numerous of people over the phone and all have explained to me saying yes your mortgage is at 0%,so basicly now our mortgage is €250 over 27 years but we are overpaying each month,do we continue to do this or would we be better putting our finances to something else like pension.
 
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OK, so €250 x 12 months = €3,000 a year x 27 years = €81,000

So it will be paid off when you are 70 years old.

You are putting €7k extra into your pension and building up a savings of €20,000

It's very odd and you could certainly afford to pay €1,000 a month.

The only downside I can think of is that you might find it difficult to trade up. But if you have no intention of trading up, then leave it alone.

You certainly don't want them to charge you interest and increase it to €1,000 a month and then you later find yourselves in arrears again.

For example, if they put the rate up to 3% and set the term at 10 years, it would cost you €800 a month.
 
Gwenbc said:
Other Borrowings:Car Loan €270 per month

Savings and investments:20,000 savings
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Gwenbc said:
we are overpaying each month
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How much is outstanding on the car loan? I presume that the lender is charging you interest?

I think you should apply the overpayments to this loan and save some interest.

Alternatively, use the €20,000 savings to clear the car loan.

Brendan
 
Brendan Burgess said:
How much is outstanding on the car loan? I presume that the lender is charging you interest?

I think you should apply the overpayments to this loan and save some interest.

Alternatively, use the €20,000 savings to clear the car loan.

Brendan
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Sorry I forgot to say the car is also on 0% finance.
 
It strikes me that you are responsible and "good with money" - anyone with two interest-free loans must know what they are doing.

In such circumstances an interest-free low repayment loan is unlikely to lead to you living beyond your means.

You probably don't trust KBC and wonder what they are up to. I don't see any downside although I don't understand what they are up to.

Unless you are planning to trade up and need a clean credit record, then continue as you are. Keep putting the free money into your pension. When BoI takes over KBC, I suspect that they will review the loan and start charging you interest. But by then, your car loan will be clear and you will be able to afford the increased repayments.

Brendan
 
Brendan Burgess said:
It strikes me that you are responsible and "good with money" - anyone with two interest-free loans must know what they are doing.

In such circumstances an interest-free low repayment loan is unlikely to lead to you living beyond your means.

You probably don't trust KBC and wonder what they are up to. I don't see any downside although I don't understand what they are up to.

Unless you are planning to trade up and need a clean credit record, then continue as you are. Keep putting the free money into your pension. When BoI takes over KBC, I suspect that they will review the loan and start charging you interest. But by then, your car loan will be clear and you will be able to afford the increased repayments.

Brendan
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Ye your right I don't trust KBC to me there just passing it over to BOI and then they can charge people higher interest which is not right.So do you think I should just pay the €250 a month while it's at 0% and put the rest into pension or pay as much off the mortgage as I can while it's at 0%.
 
Hi continuing on now we've paid off our first part of the mortgage and are paying the warehouse mortgage now which has transferred to BOI but we've just received our Deeds to the house in the post stating to sign of receipt of ownership and I've rang KBC and can't get an answer.

Has anyone heard of this?
 
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