KBC announces fresh mortgage rate cuts
Mark Whelan
Staff Writer

KBC has introduced a range of cuts to its variable and fixed mortgage rates, which makes the bank one of the most competitive in the Irish mortgage market.

Irish borrowers are still paying higher mortgage rates than our European counterparts.

The Central Bank of Ireland recently revealed that the average rate on new agreements for Irish borrowers stood at 3.18% in January. But the equivalent eurozone rate was just 1.80%.

Despite the yawning gap, Irish mortgage rates have been falling and, thanks to a range of new cuts from KBC, are set to fall further.

What is KBC’s new variable rate?

KBC has cut its variable rate for borrowers with a loan-to-value ratio of 80%-90% from 3.50% to 3.30%.

This will be the third lowest variable rate available to first-time buyers, after AIB and Haven who each are offering a rate of 3.15%.

Let’s look at the impact of KBC’s rate cut with an example.

Say a first-time buyer is borrowing €270,000 over 30 years to buy a €300,000 property.

At KBC’s outgoing rate of 3.50%, she/he would have had to repay a sum of around €1,212 a month, or €14,544 a year.

At KBC’s new rate of 3.30%, the same borrower will have to pay about €1,182 a month, or €14,184 a year, which is a saving of €360 a year.

Over the 30-year term of the loan, that 0.20% cut could amount to a difference of over €10,000.

What are KBC’s fixed rate cuts?

Fixed rates are becoming more and more popular among borrowers, so it’s no surprise that KBC has cut a number of its fixed rates too.

The bank is taking its 2-year and 3-year fixed rates for borrowers with a loan-to-value ratio of 80%-90% down to 3.00%.

The cut makes KBC a joint market-leader for 2-year and 3-year fixed rates with Bank of Ireland.

At a rate of 3.00%, a person borrowing €270,000 to buy a €300,000 property will pay about €1,138 a month in repayments.

KBC’s discounts for current account holders

KBC offers a 0.20% mortgage rate discount to customers who have a current account with the bank from which the mortgage is paid.

It’s important to note that KBC’s new rates are inclusive of this 0.20% rate.

With discounts like this available, there’s a strong argument for customers to switch current account to take advantage of these offers, which can be worth thousands of euro over the lifetime of a property loan.

KBC recently launched an app which allows customers to open a current account with the bank in five minutes from a mobile phone.

The bank will also soon make it possible for customers to apply for a loan of up to €20,000 from a mobile phone and receive the money in less than an hour.