Thousands more mortgage holders are paying high variable rates when they could get a better deal.
Thousands more mortgage holders are paying high variable rates when they could get a better deal.
KBC Bank is due to tell the Oireachtas Finance Committee it has 36,000 residential customers paying variable rates, which are its most expensive home-loan option, when they could get a lower priced deal from a bank.
It comes after it emerged that more than 100,000 homeowners at Bank of Ireland and Permanent TSB are paying up to €3,000 more a year on their mortgages than they need to at the two banks.
Customers of Bank of Ireland and Permanent TSB could move to better-value rates offered by their own banks and cut monthly payments by up to €300.
They are paying variable rates, for long the most expensive mortgage products, while both banks have lower rates available to their customers.
Both banks have written to their customers warning them they are paying too much and could make enormous savings by switching to a different rate.
Bank of Ireland chief executive Francesca McDonagh told the Oireachtas Finance Committee last week that close to 44,000 residential customers are on its standard variable rate along with almost 10,000 buy-to-let mortgage holders.
Permanent TSB told the same committee last month that 57,000 of its customers on variable rates had failed to apply for a lower deal, known as the managed variable rate.
KBC Bank's variable rate is 4.25pc, but it has fixed rates as low as 2.8pc, the committee, chaired by Fianna Fáil's John McGuinness, is to be told.
The customers can also reduce their mortgage rate by 0.2pc by signing up for the bank's current rate.
Existing customers who have equity built up in their homes, or new buyers with large deposits, can get lower fixed and variable rates based on the loan to value ratio of their mortgage.
The difference between paying a 4.25pc rate and a 2.8pc works out at almost €250 a month for a €300,000 mortgage.
Over a year this is close to €3,000.
KBC is to tell the committee: "The bank currently offers a range of variable and fixed rates based on the LTV ratio of the mortgage.
"An existing customer may obtain an up to date valuation of the property from a KBC-approved valuer, which may result in a reduction in the interest rate applicable, subject to meeting the LTV (loan-to-value)-ratio criteria of the pricing schedule."
Indications from the European Central Bank are that interest rates could rise as soon as September next year.
It had been thought any rise would be held off until December 2019.
Higher ECB rates would mean people on trackers and variable would pay more. Those on fixed contracts would be unaffected.