Fixed rate to Tracker?

[Dustyman]

Hi all,

Just a couple of queries and excuse my ignorance on these matters.

I have a Mortgage with KBC HL on APR 5.37 fixed for 3 years. This 3 years is up in Janurary of next year. It states in the 'Loan General Conditions' that "At the expiry of the fixed rate period the intrest rate shall be no more than 1.25% above the prevailing European Central Bank Main Refinancing Operations Minimum Rate for the remaining term of the loan". Does this mean I will be offered a Tracker Mortgage or does such a thing exist any more?! Will KBC HL offer me a fixed or variable rate or will they just decide themselves and tell me I have no choice? I'm not sure?
Also I had to take a period of c. 10 months 'intrest only' during the 3 years will this be added to the 3 yr fixed term, i.e 3 yr's and 10 months and then the change from fixed can start?? Or will it just change at the end of the 3 years irrespective of the intrest only break.

Also, if I decided to rent my property in the future what potential changes could occur re my mortgage?

Any advice would be greatly appreciated. Thank you in advance for your replies.

 

[Flarp!]

I'm in a similar situation, my 3 year fixed with KBC at 4.49% is up next month. My fixed rate will revert to the same tracker as yours.

I rang KBC a couple of months ago to verify this was still the case, and they confirmed that my loan would still be reverting to a tracker.

There was a discussion on Matt Cooper's programme on Today FM yesterday evening about someone who had only a verbal agreement with their lender to revert to a tracker at the end of the fixed rate term, however when the fixed rate ended they were placed on a Standard Variable Rate, and because of no written agreement their entitlement to a tracker was tenuous at best.

However, as you and I have written contracts with the bank to revert to the tracker, I imagine (I'm no legal expert) that the bank can not revert us to SVRs without our agreement.

I'm really looking forward to having some extra cash every month as you can imagine!

I'm not sure about your other questions but I find KBC's customer service very helpful any time I've been in touch with them.

 

[Brendan Burgess]

If you have a loan agreement which tells you that you will switch to a tracker at the end of the fixed rate period, then that is what will happen.

I had to take a period of c. 10 months 'intrest only' during the 3 years will this be added to the 3 yr fixed term, i.e 3 yr's and 10 months and then the change from fixed can start?? Or will it just change at the end of the 3 years irrespective of the intrest only break

I don't think so. If you are paying 5.37% interest, then it's not costing the bank anything to switch you to interest only.

 

[Dustyman]

Thanks for your replies folks. I actually sent an email to the National Consumer Agency and here's what they said,

'From the information you have provided it does appear you will be offered a Tracker Mortgage at the end of your fixed term period and tracker rates usually continue over the term of your mortgage unless you make a material change to your terms and conditions.'

So hopefully! I'll trawl throug the T & C's to double check. I will contact KBC and if they try and tell me I'm only going to get a variable rate with them I'll come back with this.