Bank of Ireland commitment on KBC customers' mortgage rates

Brendan Burgess

Brendan Burgess

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If you are a KBC customer and don't switch, your mortgage will move to Bank of Ireland.

BoI was challenged on the rates they will offer ex-KBC customers today at the Oireachtas Finance Committee.

When the transcript is published in a day or two, take a copy of it.

And take a screenshot of the KBC rates today.

It is at the end of Jim O'Callaghan's questioning. This is my transcript of it, but the official one will be much more important.

O'Callaghan : KBC customers who did not benefit from cash back will have to pay the much higher rates of BoI customers!

BoI CEO KBC customers will be paying the rate they are being charged today

If we take a decision to change rates the changes will be applied to all customers equally.

If we reduce rates by .25% we will change the rates charged to KBC by .25% as well.
 
I attach a screenshot of the KBC rates as of today's dates in case anyone needs them in future.
 

Attachments

  • Our Mortgage Rates - KBC 16th September 2022.pdf
    737.6 KB · Views: 444
@Brendan Burgess I have looked again at the document published by the CCPC about the conditions that will be imposed on Bank of Ireland in relation to KBC mortgage customers. It explicitly says exactly what the BOI interim CEO said in his appearance before the Oireachtas Finance Committee (emphasis added):

2.3 KBCI SVR
2.3.1 BOI shall, from the Completion Date, make available a set of Transferred Mortgage SVRs to Transferred Mortgage Customers on the date of their first expiry and roll-off from a Fixed Rate that was agreed with KBCI before the Completion Date, which are independent of any BOI SVR.

2.3.2 BOI undertakes that this set of Transferred Mortgage SVRs referred to in clause 2.3.1 above shall be the same interest rates, from the Completion Date, to the set of KBCI SVRs advertised by KBCI at or most recently prior to the Completion Date.

2.3.3 For the avoidance of doubt, the Transferred Mortgage SVRs are variable rates which may change from time to time. However, BOI may not adjust the interest rates associated with the Transferred Mortgage SVRs other than by the same number of BPS by which BOI SVR customers who fall within the same customer cohorts are adjusted by BOI.

2.3.4 BOI shall, from the Completion Date, offer the relevant Transferred Mortgage SVR to a Transferred Mortgage Customer on the first expiry and roll-off from a Fixed Rate that was agreed with KBCI before the Completion Date, in addition to any interest rates offered by BOI to all BOI customers.

2.3.5 The relevant Transferred Mortgage SVR offered to a Transferred Mortgage customer shall be determined on the basis of the relevant loan-to-value range and other SVR cohort identifiers used by BOI (e.g., BTL) applicable to that customer on the date of the first expiry and roll-off from the Fixed Rate agreed with KBCI before the Completion Date.
Click to expand...

So BOI will have two sets of variable rates: one set for BOI customers and one set for KBC customers. And the KBC rates can only be changed by the same amount (in percentage-point terms) as the BOI rates are changed by.

But at the end of their fixed-rate period, a KBC fixed-rate customer who decides to stay (or has to stay) with BOI will have only two choices, both of which are really poor:
  • Roll off onto KBC's variable rate
  • Switch to a Bank of Ireland fixed rate (not a KBC fixed rate)
    • And they can't choose a low BOI fixed rate, because those are only available to new customers. They can only choose the BOI rates that are available to existing customers.
 
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Bank of Ireland's variable rates are too high. They are set at a rate to force people to fix. This agreement probably cements them. If BoI wants to raise KBC's rates, then they will just increase BoI's variable rates as well.

Brendan
 
Here is the section of the transcript relating to the rates that will be available to KBC customers when their mortgages are bought by Bank of Ireland:
www.oireachtas.ie

Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach debate - Wednesday, 14 Sep 2022

Banking Issues: Discussion Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach debate - Wednesday, 14 Sep 2022
www.oireachtas.ie

Interim BOI CEO Gavin Kelly confirms what is written in the CCPC decision, namely, BOI will have two sets of variable rates: one set for BOI customers and one set for KBC customers. And the KBC rates can only be changed by the same amount (in percentage-point terms) as the BOI rates are changed by.

But at the end of their fixed-rate period, a KBC fixed-rate customer who decides to stay (or has to stay) with BOI will have only two choices, both of which are really poor:
  • Roll off onto KBC's variable rate
  • Switch to a Bank of Ireland fixed rate (not a KBC fixed rate)
    • And they can't choose a low BOI fixed rate, because those are only available to new customers. They can only choose the BOI rates that are available to existing customers.
 
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