unfortunate
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Variable rates in general followed the ECB rates, so those differences would be quite normal for all bank's standard variable rates in a competitive environment. It was only from late 2008 that a divergence appeared.Hi Brendan.
Rate I was on in July and August 2006 was 4.34 , and 4.59 in September 2006 .
Both a difference of 1.34 from the ECB of which was 3.00 for July and August and 3.25 for September. Prevailing rate .
Rates in handbook, 3 rates. Fixed. Variable, Split.
I would consider a handbook more part of the contract then the flier. For example my house insurance contact has a handbook, and it can change from year to year. I always thought in that case the handbook was part of the contract.I don't understand that.
The Handbook is part of the contract or very close to it.
The flyer is very much more distant.
I would have argued both but prioritised the handbook.
Brendan
Variable rates in general followed the ECB rates, so those differences would be quite normal for all bank's standard variable rates in a competitive environment. It was only from late 2008 that a divergence appeared.
I checked a previous mortgage I had with Bank of Ireland from Jan 2003 - Jan 2005 (variable rate at discretion of the bank) and it was 1.49% above the ecb rate at the start and it was 1.49% above the ecb rate when I redeemed it in Jan 2006 when I moved house and during the 3 year period, it was almost always 1.49% difference.
As I understand it trackers are linked to the ECB rate so if there was a change in the ECB rate the rate for tracker customers automatically reflected the full ECB rate change Eg if you had a margin of 1.1 above the ECB rate and the ECB rate increased from 2 % to 2.25 % the tracker customer rate would change from 3.1 % to 3.35 %.
As you rightly say variable rates follow the ECB rates including SVRs but generally at the bank discretion. They may or may not pass on an ECB rate change to SVR customers and may not pass it on in full .
With respect to KBC cases, for those who started on discounted rates to roll onto prevailing rates as opposed to a fixed rate, if they received letters passing on in full ECB rate increases in 2006, this may evidence that they were on discounted rates linked to a tracker product as opposed to an SVR product. I don't think changes in ECB were passed to SVR customers in full in those years if at all in early 2006.
And back to a constant query on all the KBC threads , did they even have an SVR product 2005-2007 for residential and buy to lets
Hi Peemac, agree they had the rate however they have told me that the term Standard Varaible Rate was only introduced to loan offer documentation in 2013.As for KBC having a SVR - of course they did as many of their existing loan book at the time were on SVR, so the rate existed. It may not have been marketed as the market itself had no interest in it. (I sell candles - I have Christmas candles in stock and available, but I don't display them because there's no demand for them in April, but if you asked me for one, I'd be able to get it from the warehouse)
As for KBC having a SVR - of course they did as many of their existing loan book at the time were on SVR, so the rate existed. It may not have been marketed as the market itself had no interest in it. (I sell candles - I have Christmas candles in stock and available, but I don't display them because there's no demand for them in April, but if you asked me for one, I'd be able to get it from the warehouse)
A broker is not going to tell a client about a rate that is very similar but not as good value. So whilst they were probably available (and no reason to say they weren't) no broker with half a brain would suggest a client takes a SVR when a good tracker was available.Yep isn't that exactly the point here that they technically had an SVR available if you wanted but it was not the product being sold by brokers (95% of mortgages at time through brokers) on KBC's behalf or by the bank directly. The bank might turn around now and try to claim it was correctly an SVR when the product sold at the time was a tracker and the expectation at the time of contract signing that roll off would be to tracker. They cannot be allowed to shift the goalposts after the fact .... although they have tried....
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