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KBC cuts mortgage rates and increases cashback incentive

KBC has cut a number of fixed rates for new and existing customers, and increased its cashback switching incentive from €2,000 to €3,000. This is the latest cut in an emerging trend of banks lowering fixed mortgage rates.

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KBC has become the third major bank to cut mortgage rates in the last month, indicating a fresh trend of falling fixed rates in the Irish market.

Ulster Bank and Permanent TSB each cut a number of fixed rates last month and it will be interesting to see if theses changes prompt the likes of AIB and Bank of Ireland to do likewise.

KBC’s fixed rate cuts

KBC’s new cuts. which come into effect on May 2nd, are to its 2-year, 3-year and 5-year fixed rates for new and existing customers with an LTV to 80% - 90%

The biggest cut is 0.35%, which comes off the bank’s 3-year fixed rate.

While 0.35% might not sound like a big cut in isolation, it can add up to thousands of euro of savings over the lifetime of a loan.

Let’s look at an example.

Say you’re buying a house for €300,000 and are borrowing €270,000 (which gives you an LTV of 90% and therefore qualifies you for KBC's new rates).

On KBC’s old 3-year fixed rate of 3.65%, you’ll pay €1,587 a month in repayments.

But on the bank’s reduced rate of 3.30%, you’ll pay €1,538, which is €49 less every month. And that adds up to a saving of €588 over the course of a year.

Here’s an overview of all of the cuts.

Product Type

Current Pricing

Rate Change

New Pricing

New Fixed Rates

2 Yr Fixed 80-90% LTV

3.65%

-0.25%

3.40%

3 Yr Fixed 80-90% LTV

3.65%

-0.35%

3.30%

5 Yr Fixed 80-90% LTV

3.75%

-0.20%

3.55%

New Fixed Rates (Current Account Discount Included)

2 Yr Fixed 80-90% LTV (CA)

3.45%

-0.25%

3.20%

3 Yr Fixed 80-90% LTV (CA)

3.45%

-0.35%

3.10%

5 Yr Fixed 80-90% LTV (CA)

3.55%

-0.20%

3.35%

Further discounts to current account holders

In addition to its rate cuts, KBC is continuing to offer a further 0.20% off mortgage rates to its current account holders.

With this 0.20% discount factored in, KBC’s new cuts mean that it is possible to get a 3-year fixed rate for 3.10%, which is the lowest rate available for this type of mortgage currently available to first-time buyers.

KBC also recently became the first bank in Ireland to make it possible for customers to switch their current account to the bank from a mobile phone.

Cashback incentive increase

KBC isn’t only targeting first-time buyers with its rate cuts - the bank is actively attempting to attract mortgage switchers too.

The bank will increase its cashback incentive to switchers from €2,000 to €3,000 from May 2nd.

This large lump sum offer, along with new rates which are available to switchers, make KBC an attractive option for customers looking to reduce their monthly repayments.

At the inaugural bonkers.ie awards in March, KBC won the Best Value First-Time Buyer Mortage, Best Current Account and Best Value Switcher mortgage categories.

Switching Mortgages

The Central Bank of Ireland recently released the results of its research into mortgage switching, which revealed that the majority of those that had gone through the switching process had a “positive experience” doing so.

The Central Bank has previously stated that borrowers can save “significant sums of money” by switching mortgages.

Consumers can now easily compare rates and switch mortgages on bonkers.ie, step one is to see how much you could save by using our Mortgage Calculator.


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