Overpaying a KBC tracker mortgage

N

Newbie!

Registered User
Messages
900
I have a question that Im almost embarressed to have to ask but here goes anyway.

We have a mortage for say €300k from KBC taken out over a 35 year period. 18months into the mortgage we decided we could spare another 200euro per month and decided overpay our mortgage. At the time of doing this (I think from advice here) we wrote to KBC and asked them to use this money to reduce the term of our loan.

Today, 5 years on, I called KBC to arrange increasing this overpayment and he told me there is none on our account (?). Now the term definitely reduced from 33.5 years to 27years at that time. Does it mean that the 200euro is not a seperate payment as such and that KBC calculated a new term based on our original payment plus €200?

I dont think Im outlining this very well so if someone sort of understands me, can you let me know the exact details you need to explain it to me?
thanks :eek:
 
Sounds like KBC formally reduced the term of your mortgage to 27 years. So the extra €200 per month isn't considered an "overpayment" per se, but the normal repayment on your new, shorter mortgage. It's a bit disappointing that the KBC staffer couldn't have told you this.
 
Thanks Liam, after a mini panick yesterday, I went home and pulled out all our correspondence frm KBC and found out that yes, the overpayment was used to reduce the term by 80 months and was therefore swallowed into our normal monthly repayment and was not a seperate repayment.

The customer service rep from KBC told me there was no form of overpayment on our account. Maybe he would have to look at historic data to see the term reduction?
 
A few other points occurred to me: -

  • KBC used to offer a facility whereby you could redraw overpayments on request. Because your extra €200 per month wasn't deemed to be an overpayment, I'm guessing that this "redraw" facility isn't open to you.
  • I note that you're on a tracker. Being an Askaboutmoney regular, I'm sure you've investigated other avenues before deciding to overpay the tracker. If you've any more expensive debts e.g. term loans, car loans, CU loans, credit cards etc., overpay them first.
  • Then there's the temporary anomaly that you can get a better rate of interest on deposit (even after DIRT tax) at present than the rate of interest you're saving by overpaying a good tracker rate. In some instances, it can be beneficial to save elsewhere and only pay down the mortgage when the anomaly ceases to exist, i.e. when the savings interest after DIRT tax drops below the mortgage rate.
 
Thanks Liam, we don't have any outstanding debts other than the mortgage. We already save between 1500-1700/month, mostly into high interest accounts so the extra we pay on the mortgage now is purely what we have saved by being on a tracker. We are one of those couples who desperately want to buy a new home in the coming years, so we're trying to keep our heads down and keep saving. Baby #1 is on the way now though so I suspect we wont be able to keep the same standard of saving going next year.
 
Tracker mortgage with kbc

If I stop claiming trs credit on mortgage because I've split with partner and no longer live there. Will this effect my tracker
 
You must log in or register to reply here.
Back
Top