Which is the best lender to take out a mortgage with? - Discussion

"Just the lowest monthly mortgage repayments over the term of your new mortgage with a KBC current account"

What exactly does this mean? Are they going to rate match what any other bank is willing to offer in the future over the next 25-35 years ? LIke most things, the devil is in the detail
 
I am not sure that the devil is in the detail of this one.

It's a prominent ad with no asterisks or qualifiers. If you do take out a KBC mortgage based on this ad I think you will have a very good claim that you are entitled to the lowest mortgage repayments over the term of your mortgage
 
I just called the KBC customer services, the lady on the phone said that the future reductions are for the NEW customers only and not applied to the existing customers. I am sure customer services would have been briefed if there was a new policy. I will wait for the brokers to get back to me on this. will keep you guys posted.
 
This is what the broker said,

"Well it seems there is NO guarantee you will get a future cut on the 3.30% rate that you would start out on if that rate was subsequently cut to new entrants later in the year- entirely at the discretion of the bank as you can see. It’s usually the case with all – at their discretion- but did you say AIB have confirmed to you that you would definitely be getting any future rate cut that would apply to their new business entrants?"

Does the AIB guarantee that they will pass on the future cuts to the existing customer ?
 
bbari1 said:
Does the AIB guarantee that they will pass on the future cuts to the existing customer ?
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I don't believe there is any explicit guarantee but that has been their practice over the last couple of years.
 
gnf_ireland said:
"Just the lowest monthly mortgage repayments over the term of your new mortgage with a KBC current account"

What exactly does this mean?
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I would read that to simply mean that the current account discount is not a short-term, "teaser" rate. In the context in which it appears, I think it's pretty clear that KBC are simply trying to distinguish their offering from the BOI/PTSB offerings.
 
Sarenco said:
I don't believe there is any explicit guarantee but that has been their practice over the last couple of years.
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You are right, there isn't any guarantee with AIB either. I called AIB earlier and they said the same.

When borrowing €230K over 25 years, it will cost an additional €10K with AIB (3.55%) when compared with KBC (3.30%). The only way I will avoid the additional cost if AIB passes on the cuts to existing customer in future.

Are we hoping/expecting any cuts by AIB in the future ?
 
@bbari1 Do you care if you switch in 1 year? Will you be able to switch in 1 year? Who do you switch too in 1 year?...
If you go with KBC you would want to be able to answer the above questions...

More than likely (Based on the past):
KBC won't give you the any new cuts, AIB will.
 
bbari1 said:
Are we hoping/expecting any cuts by AIB in the future ?
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I think all the banks will have lower interest rates over the next year. That's the current trend... but it could swing the other way if there is a major downturn...
 
@bbari1 - making predictions is always difficult, especially about the future!

If it was me, I would go with the lowest rate available today - 0.25% is not an immaterial difference.
 
SS... if not much cost or inconvenience i wouldn't mind switching every year.

Sarenco. Lowest available rate is by KBC but apparently it's a No No by everyone.

Would you choose aib over kbc even they are 0.25% higher than aib?

Apologies for all the questions and I'm sincerely thankful to all of you.
 
Switching is a pain in the ass... it takes 2-3 months!

If you go with KBC the only viable option is to switch to ulsterbank or maybe a new entrant

PTSB & BOI will lock you in for 5 years
AIB you will need to cover solicitor fees of ~1000 euro

after that you could go back to KBC but I think they will then lock you in for 3? years
 
bbari1 said:
Would you choose aib over kbc even they are 0.25% higher than aib?
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Would I opt for AIB if the interest rate on offer today was 0.25% higher than the rate offered by KBC today? No, in those circumstances I would go with KBC.

If the margin was lower (say, 0.1%), I might go with AIB.
 
Sarenco said:
Would I opt for AIB if the interest rate on offer today was 0.25% higher than the rate offered by KBC today? No, in those circumstances I would go with KBC.

If the margin was lower (say, 0.1%), I might go with AIB.
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You would go with KBC even they didn't / won't pass on future cuts to the existing customers ?
 
bbari1 said:
You would go with KBC even they didn't / won't pass on future cuts to the existing customers ?
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Yes, if they were charging 0.25% less than AIB. It's a judgment call at the end of the day but 0.25% is not an immaterial difference and there is no guarantee that KBC or AIB will ever charge lower rates in the future, either to new or existing customers.
 
Ulster Bank has committed to making the rates for new customers available to existing customers. They also allow existing customers avail of lower LTV rates if their LTV falls into a new category.

AIB has made no commitment but it has been their practice to pass on rate cuts equally to new and existing customers. They don't allow you avail of the lower LTV rate if your LTV falls.

As they are the only two lenders to be treating their customers fairly, I would not take out a loan with any of the other lenders who does not do this.

It's all very well to say "Take out a loan with KBC and switch if they don't pass on rate cuts". Most people don't get around to switching. And some will not be able to switch e.g. if they change job or if their income falls. Look for a lender who treats you reasonably well, not a lender who waves sweeties in your face, and then screws you as soon as you are an existing customer.


ptsb now has the same headline rates for new and existing customers, but they compete for new business by offering 2% cash back and a 0.5% discount in the first year. This allows them keep the headline rates high.
 
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