Interest Rates



Interest rates

Current Interest Rates


View our different interest rates:


Interest Rates Explained 


Fixed Rates

With a fixed interest rate, the monthly repayment you make is fixed for the period you choose, (normally 1, 2, 3 or 5 years). After this fixed rate period has passed your interest rate will become a variable rate unless you choose to take a fixed rate for a further period. A fixed rate is not affected by changes in general market interest rates.  This means you will not be subject to any rate increases during the fixed period nor will you be able to avail of any rate reductions that may be passed to variable rate customers. 

When you choose a fixed rate, you benefit from knowing exactly how much your monthly mortgage repayment will be during the fixed period, which makes budgeting your finances easier. The disadvantages of a fixed rate can be that you will not benefit from any reductions which may apply to variable/tracker rates during the fixed period and if you decide to redeem your mortgage fully or partially during the fixed period (which may arise as a result of a sale of the property either by you or in an enforcement scenario) you may be charged a break funding fee. There is no charge for any overpayment on a variable rate mortgage. Where the account is on a fixed interest rate, a break funding fee may apply.

If, during the Fixed Rate Period, the Applicant redeems in whole or in part or converts the loan into a variable interest rate or to another fixed rate loan, on that date (the "switching/redemption date"), a "break funding fee" will be payable to the Lender. If, at the switching/redemption date the Wholesale Rate is higher than the Wholesale Rate at the date the existing fixed rate applying to the Loan was set, no break funding fee arises. If, however, at the switching/redemption date, the Wholesale Rate is lower than the Wholesale Rate at the date the existing fixed rate applying to the Loan was set, then a break funding fee will be chargeable. The break funding fee will be calculated by reference to the following formula:

B = (W - M) x T / 12 x A, where:

B = The Break Funding Fee.

W = The Wholesale Rate Prevailing at the date of the existing fixed rate applying to the loan was set.

M = The Wholesale Rate prevailing at the switching/redemption date for the unexpired time period of the Fixed Rate Period.

T = Period of Time in months to the end of the Fixed Rate Period.

A = Principal amount which is subject to the existing fixed rate and which is being switched or redeemed.

‘Wholesale rate’ means the rate per cent per annum which the Lender determines to be the market rate applying to an appropriate interest rate swap for the relevant time period.

The following are examples of the calculation of the break funding fee:

A) Where Wholesale rate increases over the term of the loan:

Wholesale rate at the date the existing fixed interest rate applying to the loan was set (W): 7%

Wholesale Rate at switching/redemption date (M): 8%

Break funding fee €0

B) Where Wholesale Rate decreases over term of loan:

Wholesale Rate at date the existing fixed interest rate applying to the loan was set (W): 8%

Wholesale Rate at switching/redemption date (M): 7%

Break funding rate 1%

Unexpired Fixed Rate Period (T) Six months

Break funding fee (per €1,000 loan amount) €5

Break funding fee = (8%-7%) x 6 / 12 x 1,000 = €5.00 per €1,000.00

If you currently avail of a tracker interest rate (which is a variable rate that is set at a constant percentage above the ECB Base Rate) or a variable rate, then by choosing a fixed rate you will not benefit from any reductions which may apply to tracker or variable rates during the fixed period.

Variable Rate

With a variable rate, your monthly repayments may rise or fall from time to time. If the variable rates fall your monthly repayment reduces, while if variable rates rise, your monthly repayment increases. Variable rates can be increased or reduced at the discretion of the lender.

When you have a variable rate, you benefit from lower monthly repayments as a result of any reductions which may apply to variable rates and if you decide to redeem your mortgage you will not be charged a break funding fee. The disadvantage of a variable rate can be that your rate and monthly repayment may increase and as a result you do not know exactly how much your monthly mortgage repayment will be, which makes budgeting your finances more difficult.

 

Tracker Rate

With a tracker rate, your monthly repayments may rise or fall from time to time. If the tracker rates fall your monthly repayment reduces, while if tracker rates rise, your monthly repayment increases. Tracker rates increase or reduce in line with increases and reductions in the European Central Bank ('ECB') base rate.

When you have a tracker rate, you benefit from lower monthly repayments as a result of any reductions which may apply to tracker rates and if you decide to redeem your mortgage you will not be charged a break funding fee. You will also benefit from the certainty that your rate will be maintained at a constant margin above the ECB base rate. The disadvantage of a tracker rate can be that your rate and monthly repayment may increase and as a result you do not know exactly how much your monthly mortgage repayment will be, which makes budgeting your finances more difficult. This section applies to existing customers currently availing of a Tracker Rate. Tracker Rates are no longer provided as part of the KBC Interest rate offering’.

 

Split Rate

You may choose to set a part of your mortgage at a fixed rate and the remainder at a variable/tracker rate. If variable/tracker interest rates are reduced, your repayments on the variable/tracker part of your mortgage will reduce, while if variable/tracker rates rise you have the security of knowing that only the payment on the variable/tracker portion of the loan will increase.

 

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  • Registered in the Republic of Ireland. Number 40537
  • Registered Office: Sandwith Street, Dublin 2, Ireland