As of today the best variable rates in the market for loans with a loan to value below 80% are those recently annonunced by KBC Homeloans and Permanent TSB
These rates are a very positive change in the Irish Mortgage Market because alongside Permanent TSB, KBC are actually reducing rates without an ECB reduction.
So what are these rates and who they reward?
These rates are designed to reward those who have more equity in their property i.e. those who have a lower LTV. LTV is loan to value and it is calculated by dividing the loan amount by the value of the property. For example:
1) House purchase price of €300,000
2) Deposit of €100,000
3) Mortgage/Loan required = €200,000
Therefore, the LTV is (3): €200k divided by (1):€300k equals 66%
For a mortgage with an LTV of 66% KBC are offering a rate of 3.99%, with the next best being Permanent TSB at 4.2% and the main banks higher at circa 4.3%.
The saving on this loan over 25 years against the high street banks is €34 per month or €408 per annum or €10,200 over the course of the mortgage as it stands!!
So, who are KBC Homeloans?
They employ over 700 people in Ireland and are part of KBC Bank NV, one of Europe’s largest banks. KBC entered the Irish market by acquiring IIB Homeloans and still operate from there old headquarters in Sandwith Street, Dublin.
So, who should apply?
In truth anyone who is looking for a new mortgage or anyone who might have a large mortgage with another provider at a higher variable rate. One of the areas where KBC excel is in there treatment of those with a property in negative equity who would like to rent this out and purchase a new home.