# Will BoI honour the 0.2% mortgage rate discount KBC customers get?



## Daragh29 (22 Oct 2021)

Brendan Burgess said:


> Well they pay brokers 1% for getting them business at market rates.
> 
> They will be paying 103.6% for tracker mortgages yielding a lot less.
> 
> ...


Will there be any obligation for BOI to provide the 0.2% discount?


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## Stitcher (23 Oct 2021)

Re the 0.2% discount mentioned above by  Daragh29, I presume this refers to the 0.2% discount on the mortgage rate for having a kbc current account,  I am wondering the same thing.  It is not included in the actual fixed rate in the contract so my guess is they won't but I wonder if they'll give it if  you move current account to BOI?   

Is there any way of finding out ahead of the move?


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## Brendan Burgess (23 Oct 2021)

Your terms and conditions remain unchanged. 

If KBC makes it impossible for you to keep your terms and conditions because they no longer offer you a current account, they will not be able to withdraw the discount.

Brendan


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## skrooge (23 Oct 2021)

The fact that €4.4 billion of deposits are moving suggests there is a chance they will keep honouring it.

 It's not as if BOI need the deposits. But like all banks they probably see a current account as a first step to selling people other products. Be strange then to roll back on the discount in that situation.


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## faketales (28 Oct 2021)

Brendan Burgess said:


> Your terms and conditions remain unchanged.
> 
> If KBC makes it impossible for you to keep your terms and conditions because they no longer offer you a current account, they will not be able to withdraw the discount.
> 
> Brendan



I'm in this situation also. I presume it is important to retain the current account until KBC make it impossible not to. So my mortgage will be transferred to BOI while we still have accounts with KBC to meet the condition.


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## Brendan Burgess (29 Oct 2021)

Very good point. Keep your KBC account until it is transferred. 

Brendan


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## faketales (29 Oct 2021)

Am I right in thinking it could be years? As there will be hard to find people etc. I don't think the bank can sell accounts the same way they can sell loans.


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## Brendan Burgess (29 Oct 2021)

Hi faketales

It won't be years. 
They have already applied for permission for the transaction to the Competition Authority.  That will come through early next year, I imagine.

The KBC needs to give 6 months' notice to current account customers. 

Ulster Bank has told its customers that all accounts will be closed on the expiry of the 6 months and they will send them a cheque.

The problem will be the long queue in opening an account with another bank.

Brendan


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## lledlledlled (31 Oct 2021)

Brendan Burgess said:


> The KBC and BoI deal is much further advanced that Ulster Bank and permanent tsb.
> 
> So, yes KBC customers should open a new current account.
> 
> ...


Do you think those getting the 0.2% discount should continue on with their KBC current account as normal, on the assumption that being forced to move (eventually) will mean they get to keep the 0.2% discount when the loans move to BOI?


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## lledlledlled (1 Nov 2021)

Brendan Burgess said:


> Very good point. Keep your KBC account until it is transferred.
> 
> Brendan


Do you mean keep your KBC current account but also set up a new one with BOI or AIB? 

My situation is that i am currently trading up. I am 3 years into a 10yr rate with KBC so the Break Fee is too high to swallow so i am stuck with them. A Portal Loan will apply, whereby i temporarily pay the Break Fee until drawdown of the new loan, at which point it is refunded. The 10yr rate will reset to Day #1 with 10 full years to go. 

Should i be setting up an alternative current account now or should i sit still until forced to do so, in case i might lose the 0.2% discount?


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## Brendan Burgess (1 Nov 2021)

1) You will need a new current account as KBC ones will be closed
2) You should open it with Bank of Ireland as that might be a condition of retaining the 0.2% discount 

You should probably put your numbers up in a separate thread to get a second opinion on your strategy re the break fee. 

Brendan


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## faketales (4 Nov 2021)

Brendan Burgess said:


> 1) You will need a new current account as KBC ones will be closed
> 2) You should open it with Bank of Ireland as that might be a condition of retaining the 0.2% discount
> 
> You should probably put your numbers up in a separate thread to get a second opinion on your strategy re the break fee.
> ...




Valid point regarding BOI. That would probable be seen as a reasonable approach. Although I had free banking with KBC. An account with BOI costs 6euro a month. Pretty expensive but doesn't seem to be a way to avoid it. Of course loosing the 0.2% would cost me approx. 25euro a month.

When do we think we might have clarity on that condition? It may impact who I open an account with. I'd like top open with PTSB.


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## Stitcher (5 Nov 2021)

I never closed my BOI  current account when I switched to KBC a year ago, due to hassle and time taken to switching direct debits in lockdown; then there was the announcement of BOi buying out KBC !!! , I had to laugh.... so I just left it.  Hoping that if there's a requirement to open a BOI account to retain the 0.2% discount that I won't be penalised for already having an account, but wouldn't hold my breath knowing all the banks previous performance..........


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## faketales (7 Nov 2021)

Stitcher said:


> I never closed my BOI  current account when I switched to KBC a year ago, due to hassle and time taken to switching direct debits in lockdown; then there was the announcement of BOi buying out KBC !!! , I had to laugh.... so I just left it.  Hoping that if there's a requirement to open a BOI account to retain the 0.2% discount that I won't be penalised for already having an account, but wouldn't hold my breath knowing all the banks previous performance..........



Uneducated guess but I imagine the condition won't be to open an account but may be the same as KBC current condition that x amount is paid through the account. Basically that you get paid into the account.


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## Tobyboy (14 Nov 2021)

I heard on the radio that Brendan was making a submission on the KBC to BOI sale. Was this .2% discount brought up as part of this?

Does anyone know what the KBC mortgage contract says in regards to the current account .2% discount ? Is it in the contract that as long as you have a current account you get the discount or is it not? This is the only thing BOI will look at.


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## Autumn54 (16 Nov 2021)

Tobyboy said:


> I heard on the radio that Brendan was making a submission on the KBC to BOI sale. Was this .2% discount brought up as part of this?
> 
> Does anyone know what the KBC mortgage contract says in regards to the current account .2% discount ? Is it in the contract that as long as you have a current account you get the discount or is it not? This is the only thing BOI will look at.


I thought I was benefitting from the 0.2% but can't find mention of it in my mortgage contract or related documents.
My mortgage says the rate is 3.2% and that is the rate that i appear to be paying. Has anyone got anything in writing from kbc on the terms of the discount?

I plan on giving them a call later in the week anyway so will ask then but would be interested in hearing other experiences before then.


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## Brendan Burgess (17 Nov 2021)

Tobyboy said:


> I heard on the radio that Brendan was making a submission on the KBC to BOI sale. Was this .2% discount brought up as part of this?



Did you raise it in your own submission to the CCPC?


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## Tobyboy (22 Nov 2021)

I wasn't aware that I could! How is it done or is it too late for this?


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## Brendan Burgess (22 Nov 2021)

Follow the instructions here.  They had a deadline of 10th November, but they are unlikely to  ignore any submissions as I doubt that they will get many.






						CCPC to carry out a Phase 2 Investigation of BoI's deal with KBC
					

https://www.ccpc.ie/business/ccpc-to-carry-out-a-phase-2-investigation-of-bank-of-irelands-proposed-acquisition-of-certain-assets-and-liabilities-of-kbc/  CCPC to carry out a Phase 2 investigation of Bank of Ireland’s proposed acquisition of certain assets and liabilities of KBC OCTOBER 20, 2021...



					www.askaboutmoney.com
				




If a few customers of KBC make submissions, it will make the point to the CCPC that this is not a theoretical issue.

Brendan


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## Stitcher (22 Nov 2021)

I have just written to them as a KBC mortgage and current account holder.


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## Tobyboy (22 Nov 2021)

I called KBC who told me there is an understanding with BOI that the current account discount would be kept in place with having a BOI current account. Then they said there may be no obligation on them and they can change their minds after the transfer. 
There is nothing in the fixed contract saying they will have to, as it refers to a 'KBC' current account, which will no longer be possible. 

**The more of us that make submissions on this the better...**


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## Tobyboy (23 Nov 2021)

KBC CS told me yesterday at the moment there is an 'understanding' in place with BOI that they will maintain the current account discount upon transfer. He acknowledged however there is no obligation on them after that. That's worrying. There is nothing in the fixed term agreement to protect it.

We must all make submission to Brendans link above.


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## Dazzler123 (23 Nov 2021)

My understanding is that the 0.2% current account discount is an arrangement only introduced from 2014 when they were trying to entice current account customers in.  Its not part of you mortgage terms and conditions and i do not believe there is any contractual entitlement to it.


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## Tobyboy (24 Nov 2021)

I have made a detailed submission on this as well to Mergers@ccpc.ie

Hope other KBC Mortgage customers do so as well.


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## faketales (28 Dec 2021)

Dazzler123 said:


> My understanding is that the 0.2% current account discount is an arrangement only introduced from 2014 when they were trying to entice current account customers in.  Its not part of you mortgage terms and conditions and i do not believe there is any contractual entitlement to it.



My offer from KBC in 2021 states the below. It seems the lender may withdraw with one months notice. This wouldn't have been a great move for KBC but much easier for BOI to do.



> The rate of interest specified in the Particulars of Advance is the current account mortgage rate for that particular category of LTV
> Loan as specified in No 18 of the Additional Particulars of Advance (the "Current Account Mortgage Rate").AvailabilityThe
> availability of the Current Account Mortgage Rate is conditional on and subject to the Lender being satisfied that the following
> conditions have been complied with and the documents referred to herein are received in a form and content satisfactory to the Lender
> in its absolute discretion:





> (i) That the purpose of the Loan is to finance the purchase of a residential property which is to be used as the
> principal private residence of the Borrower.(ii) That prior to the drawdown of the Loan, the Borrower has opened a
> current account with the Lender (the "Current Account"); (iii)
> (a) If the Borrower is employed, that the Borrower's salary has been mandated to the Current Account and a
> ...





> WithdrawalThe Lender reserves the right to withdraw the Current Account Mortgage Rate at any time prior to the drawdown of the
> Loan. Where the Lender withdraws the Current Account Mortgage Rate prior to drawdown, the Lender's prevailing New Business Rate
> for that category of Loan will apply.The Lender further reserves the right to withdraw the Current Account Mortgage Rate after the
> occurrence of any of the following events on the provision of 30 days notice in accordance with the notice provisions of the General
> Home Loan Conditions :





> (i) on the closure of the Borrower's Current Account.(ii) if the Borrower ceases to mandate their salary to the
> Current Account; or If the Borrower ceases to maintain the payment of a monthly amount to the Current Account
> that is at least(iii) equal to the monthly mortgage repayment. If the Borrower cancels the direct debit drawn on the
> Current Account; and(iv) if the Property ceases to be the principal private residence of the Borrower.





> Where the Lender withdraws the Current Account Mortgage Rate after the drawdown of the Loan, the Lender's applicable rate for that
> category of LTV loan for existing customers will thereafter apply.
> Warning − If the Lender withdraws the Current Account
> Mortgage Rate, the interest rate applicable to the Loan will be higher than the prevailing Current Account Mortgage Rate
> ...


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## Brendan Burgess (29 Dec 2021)

My reading of those terms and conditions would not give either KBC or Bank of Ireland any additional right to withdraw the 0.2% discount. (KBC has the existing right to withdraw it now if you stop mandating your salary or if you close your account.) 

The only possibility that BoI could claim would be: 



> The Lender further reserves the right to withdraw the Current Account Mortgage Rate after the
> occurrence of any of the following events on the provision of 30 days notice ... :
> 
> (i) on the closure of the Borrower's Current Account.


So KBC closes your current account.
BoI claims that the Borrower's Current Account has been closed and so you no longer comply.

Neither the Central Bank nor the Ombudsman would tolerate this and Bank of Ireland would know this, so they would not even try it.

However, anyone potentially impacted by this should make a submission to the Competition and Consumer Protection Commission on the issue.

Brendan


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## Brendan Burgess (29 Dec 2021)

I have no idea how BoI is going to treat KBC customers. 

Are they going to have a separate rate card for them? 
They have separate rate cards for new customers and existing customers so there is nothing to stop them having a separate rate card for former KBC customers with higher or lower rates.

Brendan


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## bungaro (5 Jan 2022)

I was onto them in the last week to see about the possibility of breaking our fixed rate before the move to BOI. This isn't a runner but I did query about BOI honouring the 0.2% discount and the customer service rep said that this would be kept (she did assume it would be by moving the main bank account to BOI too) so similar to what's been said to others. With past dealings I've had with Irish banks I'll be taking this with a large grain of salt


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## Okokokoknic (7 Feb 2022)

Times Article - 
KBC clients to keep cheap mortgages​

Article is semi-paywalled, but states customers will keep the discount.
Though I think they should have stated "lifetime" in this context is the lifetime of their fixed period


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## TravisT (1 Apr 2022)

Spoke on phone to KBC this week, their customer service (mortgages) indicated that the terms of the KBC mortage would not stay same (ability to redraw funds may not be there) Also, they indicated that the variable rate could/would change.  Not sure if that's correct but is concerning... BOI variable rates seem a lot higher..


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## Hanata (7 Apr 2022)

So is everyone with the 0.2% discount staying put with their KBC current accounts until the mortgages have transferred? I'd normally be one for getting things done in good time, but presumably as soon as we switch current account we lose the discount so gotta stay put for now?


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## Tobyboy (17 Apr 2022)

I spoke to KBC Mortgages CS a couple of times recently. They have said that BOI have agreed to honor the current account discount, but knew not a thing more than that. I said, with KBC knowing this, why not just include it in the fixed rate rather than giving a discount for those holding a current account, for those who want to fix? No answer.. Wonder why they cant are are unwilling make it more water proof for customers..
I would say there is a lot of smoke screening going on to make sure this buyout goes through. So they give verbal assurances on the phone but nothing in writing! After all the people giving the verbal assurances wont be in their jobs in a year.
They have also said they are absolutely swamped with people trying to fix before this takeover happens. We wanted to break out of our 10 year fix to get back in at a lower 10 year rate. We paid off 3k from the 10 year fixed and the break fee was '0' even though we had over 4 years left. So am guessing it may be good time to do it.


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## Dreaming (26 Apr 2022)

FYI - KBC have updated their FAQ on this. Clarity at last!

Question:


> "I have a discount on my KBC mortgage because I have a Current Account with KBC. What will happen to this discount if my mortgage is transferred to Bank of Ireland?"


Answer:



> There is no immediate impact on your KBC Mortgage discount as a result of this announcement. Should a Binding Agreement with Bank of Ireland receive regulatory approval, your KBC Mortgage will transfer to Bank of Ireland at a future date.
> 
> If your Mortgage transfers to Bank of Ireland, your Mortgage discount will continue to be honoured for as long as your Mortgage remains with Bank of Ireland. You will not be required to open a Bank of Ireland Current Account to avail of the discount. *From the 1st June 2022, KBC will commence a process  of engaging with customers regarding the closure of current accounts. As of that date, you will be able to close your KBC Current Account and your Mortgage Discount will be honoured by KBC Bank Ireland and by Bank of Ireland once your mortgage transfers. *
> 
> ...



The next question then asks about closing the current account ahead of the mortgage move to BOI, and they say you can do it after 1 June 2022 and won't loose the discount. "From the 1st June 2022 you will be able to close your KBC Current Account and your Mortgage Discount will be honoured by KBC Bank Ireland and by Bank of Ireland once your mortgage transfers. In the meantime, you should continue to adhere to the KBC conditions associated with the discount i.e. continue to have your salary mandated to your KBC Current Account."

source:  https://www.kbc.ie/mortgages/important-update [accessed 26 April 2022 at 22:30hrs]
Link to source


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