Break fee for some borrowers was wrongly calculated by KBC

[Brendan Burgess]

I don't follow you.
When you did break out, you could have switched to Avant but you didn't.
You would need to provide some evidence that you intended to switch to Avant.

Most people wouldn't bother switching for a reduction from 2.4% to 1.95%.

You might have thought about it. But lots of people think about it.
But you could still have done it when you did break out.

And the size of the break fee was not really a barrier. Had they quoted you €5,000, you would have a better argument.

Brendan

 

[Mort.Switcher22]

I don't follow you.
When you did break out, you could have switched to Avant but you didn't.
You would need to provide some evidence that you intended to switch to Avant.

Most people wouldn't bother switching for a reduction from 2.4% to 1.95%.

You might have thought about it. But lots of people think about it.
But you could still have done it when you did break out.

And the size of the break fee was not really a barrier. Had they quoted you €5,000, you would have a better argument.

Brendan

Thanks Brendan, I have an AIP from ICS late march but it was an offer of the 2.45 rate LTV over 5 yrs fixed not the 1.95 over 5 years we were hoping to get as rates in ICS had gone up.
We would have moved to ICS for the 1.95 as always looking to move based on rates( disagree with you on switching from 2.6 to 1.95,). We did delay the ICS switch due to the break out fee been quoted during Q1, we always felt it was not a correct quote. We based our financial decision at the time on inaccurate information been provider by the bank. This delay cost us switching earlier when better rates were available
Thanks

 

[Brendan Burgess]

OK, that is new evidence.

ICS increased their rates on 14th March from 1.95% to 2.4%

But you got the AIP in late March.

Hi, I had the same issue with KBC break fee, was quoted 530 in Jan bit since then it was slowly coming down but then started to rise again. I decided to break out at 690 around the 20th of April. I'M still not convinced I was right to break out and pay but at the time it did not make sense fee goin back up?

It seems a bit odd to me that you did not break out of a €290k mortgage for a fee of €530.

You could have refixed at 2.4%, an annual saving of .2% on €290k or €580.

Or switched to ICS at 1.95% an annual saving of .65% or €1,900.

It would be hard to convince the Ombudsman that you chose not to break out of a fixed rate to save yourself €1,900 a year because of an excessive break fee amounting to €580. If they had wrongly quoted you €5,800, then by all mean, you would have a very good case. You would not pay €5,800 to save yourself €1,900 a year for 5 years and you could argue that you did not have the €5,800.

But by all means, make a complaint.

Brendan

 

[Paul F]

You would need to provide some evidence that you intended to switch to Avant.

@Mort.Switcher22 I'm inclined to agree with Brendan. I didn't realise that you didn't apply for approval in principle with Avant. Nonetheless, if you can convince the Ombudsman that that was only because you were waiting for the break fee to fall, your claim for larger redress might succeed (but it seems unlikely).

 

[_OkGo_]

Thanks Brendan, I have an AIP from ICS late march but it was an offer of the 2.45 rate LTV over 5 yrs fixed not the 1.95 over 5 years we were hoping to get as rates in ICS had gone up.
We would have moved to ICS for the 1.95 as always looking to move based on rates( disagree with you on switching from 2.6 to 1.95,). We did delay the ICS switch due to the break out fee been quoted during Q1, we always felt it was not a correct quote.

You were never really in a position to switch to a 1.95% rate, surely that's obvious when your AIP was at 2.4%. It is entirely your own responsibility to organise the AIP. AIP's typically last for 6 months so there was nothing stopping you organising your own documentation and having an AIP in January independent of any break fee quoted

We based our financial decision at the time on inaccurate information been provider by the bank. This delay cost us switching earlier when better rates were available

You may have been provided an incorrect break fee but you need to take a bit of responsibility for your own inaction and poor decision making. The potential to saving 0.65% on a €250k balance plus having your switching costs covered would have still left you better off by >€1000 in the first 12 months even with the break fee.

It will be very hard to argue that a €500 fee influenced your decision not to save €1k in the first year alone plus several thousands thereafter. What it implies is that you didn't understand the decision you were making. I think you just need to accept you made a mistake and move on

 

[Mort.Switcher22]

You were never really in a position to switch to a 1.95% rate, surely that's obvious when your AIP was at 2.4%. It is entirely your own responsibility to organise the AIP. AIP's typically last for 6 months so there was nothing stopping you organising your own documentation and having an AIP in January independent of any break fee quoted



You may have been provided an incorrect break fee but you need to take a bit of responsibility for your own inaction and poor decision making. The potential to saving 0.65% on a €250k balance plus having your switching costs covered would have still left you better off by >€1000 in the first 12 months even with the break fee.

It will be very hard to argue that a €500 fee influenced your decision not to save €1k in the first year alone plus several thousands thereafter. What it implies is that you didn't understand the decision you were making. I think you just need to accept you made a mistake and move on

Thanks lads, good to get ye're opinions on the subject. I got the below quotes from KBC after numerous calls on the break out fee
26 Jan 22 - 615
25 Feb 22 - 710
11 Apr 22 - 691
Raised a complaint on the 12th of April, received a letter of apology on the 2nd of June..
We did actually hold off on switching as decided that the bank were not providing us with accurate information. Question is would ye pay the bank more money say 710 in Feb knowing there was an issue with their calculation? We would not and stand by that decision.Thanks

 

[_OkGo_]

Question is would ye pay the bank more money say 710 in Feb knowing there was an issue with their calculation?

was quoted 530

I did a quick calculation over 5 yrs and cost us around 7k just looking at the difference between the 1.95 and the 2.4 over 5 yrs

For me it wouldn't have gotten to February. You had a quote of €530 from January and you were aware of the potential €7k savings so it shouldn't have influenced your decision. You should have complained and switched anyway. The error was not so prohibitive (€3-4k) to stop you switching

We would have moved to ICS for the 1.95 as always looking to move based on rates( disagree with you on switching from 2.6 to 1.95

Rates of 1.95% were available since late 2020 from Avant and from ICS from Aug 2021 so it's hard to argue that you were always looking to move based on rates. Your first contact with your broker is the best indicator of when you decided to consider switching

I'm not trying to have a go at you but rather picking holes that KBC will likely focus on if you do make a complaint and seek redress. A relatively small error on their part should not have influenced your decision that much. If it did, it still just shows that you made a bad decision and not that they were at fault.

If KBC suddenly get a few hundred customers seeking the same redress as you, the bill adds up quickly and justifies them defending it properly. So your own argument needs to be rock solid if you stand a chance of getting anywhere. At the moment, I think you best chance of redress is the 0.2% for 3 month delay in refixing plus the refund of the break fee.