Mortgage FAQs

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Do I have to initially identify the particular home I want to buy before applying for a mortgage?

No. You can try out our mortgage calculators or simply discuss your application with one of our mortgage consultants by calling 1800 51 52 53 to get an indication of how much you can borrow before you start the search for your home.

How does Mortgage Interest Relief work?

You'll be glad to hear you can get some of your hard-earned cash back by claiming Mortgage Interest Relief, also known as Tax Relief at Source (TRS). This relief is available to first time buyers for seven years. In year one and two of your mortgage, you can claim TRS at a rate of 25%; 22.5% in years three, four and five; and 20% in years six and seven. Once TRS has been granted, it automatically gets lodged to your account every month. So, for example, if every month you pay €100 interest, your mortgage lender will reduce your monthly payment by €25 in year one. To apply, simply log on to www.revenue.ie or contact the Revenue Commissioners TRS helpline on 1890 463 626.

Changes to TRS entitlement from January 2014

With effect from January 2014 changes will be made to the basis for calculating the monthly TRS credit due to on eligible accounts.

To date Revenue granted TRS credits based on the amount of interest charged to a mortgage account. From January 2014 Revenue will grant TRS on the actual interest paid on a mortgage account.  The changes do not impact the TRS band or rate applicable to a mortgage account.

How will this impact you?

  • If your monthly mortgage repayment covers the interest charged in full, you will receive the full TRS credit – therefore no change.

  • If your monthly mortgage repayment partially covers the interest charged, you will receive a partial TRS credit

  • If no monthly repayment is made, you will not receive any TRS credit.

How is Tax Relief At Source (TRS) applied to my mortgage Repayments?

 If you are successful in your application for Tax Relief at Source (TRS) with the Revenue, they will forward details of your TRS entitlement directly to KBC Bank Ireland. It can take up to 3 months following an application before your first payment is received. KBC Bank Ireland will then continue to take your full monthly direct debit due for the mortgage each month but we will apply a credit back to your bank account for your TRS payment on the same day. To visit the Revenue website please click on the link: www.revenue.ie

I am considering renting out my property. Do I need to notify KBC Bank Ireland?

Yes, as your property would no longer be classed as a ‘Private Dwelling Home’, you are required to notify us in writing with signatures from all borrowers.

I have changed my Home Insurance provider, do I need to notify KBC Bank Ireland?

When you change your home insurance details you should provide KBC Bank Ireland with a copy of the revised policy. It is also necessary to advise your Insurance Provider that you have a mortgage with KBC Bank Ireland. They will note our interest accordingly on your policy and provide us with what is called a Letter of Indemnity. This letter confirms to KBC Bank Ireland that we have been noted on the policy as an interested party.

What documentation will I need for a mortgage application?

Your KBC Bank Ireland mortgage advisor will assist you with this, but the standard documentation we require is outlined below:

Application Form
Fully completed and signed. Please ensure that all the Declarations are signed and fully completed (note there are 3 sections to be signed).

  • Bank Statements
    For Approval in Principle - 6 months continuous Bank Statements required, of which at least one must be an original.
    Any other documentation required to verify savings and/or gift for house purchase and balance of funds.
    Most recent Mortgage Statement (if applicable)
    Most recent Term Loan Statements (if applicable)
  • Credit Card Statements
    For Approval in Principle - 2 months continuous Credit Card Statements or e-statements (the latest dates within 3 months.)
  • Details of Income Verification
    Employed
    • Up to date employee status report completed & stamped by employer within the last 6 months.
    • Two recent payslips (latest within last 6 months) for each applicant.
    • Most recent P60 for each applicant.
    Self-Employed/Proprietary Director
    • Copy of audited accounts for the two most recent financial years.
    • Copy of the two most recent years tax returns (P.21 or notice of assessment).
  • Indentification
  • Photo ID
    Two forms of photographic ID for each applicant – passport and driver’s licence.
    Address Verification
    Two Original Utility Bills or bank statements required for each applicant (dated within past six months.)
    Other documentation if applicable
    Separation agreements or any other relevant legal agreements.

What does Annual Percentage Rate (APRC) mean?

A lender is always required to quote the Annual Percentage Rate of Charge (APRC) when advertising a loan or the borrowing rate and its purpose is to help you compare the true cost of borrowing. The Annual Percentage Rate of Charge (APRC) calculates the total amount of interest that will be paid over the entire period of the loan.

What is a Top-up Mortgage?

This involves existing customers of KBC Bank Ireland releasing some of the equity built up in their property.  Using the equity in a home, a top-up package can be a way to borrow for short term or long-term debt at low rates, as it is based on current market mortgage interest rates. You can use this money as you wish - for example redecorating or building an extension. Terms and Conditions apply. Please contact us for more information.

What other costs can I expect when taking out a mortgage?

There are external costs involved in buying or selling a property, which could include:

  • Stamp duty, if applicable
  • Legal fees to your solicitor
  • Valuation report, payable to the bank's valuer
  • Surveyor's report, if applicable
  • Estate Agent Fees
  • Broker Fees

Why has my Tax Relief at Source (TRS) changed?

With effect from January 2014 changes will be made to the basis for calculating the monthly TRS credit due to on eligible accounts.

To date Revenue granted TRS credits based on the amount of interest charged to a mortgage account. From January 2014 Revenue will grant TRS on the actual interest paid on a mortgage account.  The changes do not impact the TRS band or rate applicable to a mortgage account.

Our detailed FAQ below should answer any further questions you have on this and how this may affect you.

1. I did not receive TRS this month, why not?

Did you miss a repayment 2 months ago? See question 3

Did you make your payment late 2 months ago?  See question 3

Do you have arrears on our account? See question 4

 

 2. Why are KBC Bank Ireland plc (KBC) changing the way TRS is calculated from 1 January 2014?

Irish tax legislation, as introduced in 2002, sets out that TRS should be calculated based on interest which has been paid by a customer (subject to Revenue ceiling and qualifying interest). Accepted industry practice, however has been to calculate TRS based on interest charged to a customer each month.

With effect from 1 January 2014, in order to comply with 2002 Irish tax legislation, Revenue has instructed Financial Institutions to calculate TRS based on interest paid by a customer rather than on interest which has been charged to a customer.

In order to grant a TRS allowance for January 2014 (paid on 1 February 2014) and future months, KBC will be basing your TRS allowance on the amount of interest which has been paid two months previously (e.g. in determining the TRS allowance for January 2014, KBC will base the TRS calculation on the amount of interest paid in November 2013*).  However, at the end of the year the actual interest paid for that calendar year (i.e. from January to December) will be calculated and if there is any additional TRS to be granted, this amount will be paid to you with the next TRS payment following the end of the year. If you have received too much TRS this may be re-couped by Revenue directly. This is in line with current Revenue practice.  Any queries in relation to this should be directed to www.revenue.ie or phone 1890 463626.

*For ease of administration purposes a month is deemed to commence on 2nd of the month and terminate on 1st following month e.g. November 2013 = 2nd November to 1st December 2013.

3. How will the change in calculating TRS on an interest paid basis affect my account? (account with no arrears)

  • If you pay your full mortgage repayment on time each month you will be unaffected by the move to calculating TRS based on interest paid.
  • If you do not pay your required monthly interest charge on time, then you will be impacted by the changes and you are unlikely to receive full TRS for the month in which a payment was missed or paid late.

4. My accounts has historical arrears – how will the change in calculating TRS on an interest paid basis affect my account?

  • Your entitlement to TRS in respect of payments made from November 2013 may be affected due to the arrears on your account;
  • Following the implementation of interest paid in January 2014, Revenue have instructed lenders, including KBC, that TRS must be calculated based on the amount of interest actually paid by the borrower within the tax year.  This may include arrears paid within that tax year relating to unpaid amounts accumulated on or after 1 January 2014*
  • Arrears relating to periods prior to 1 January 2014* will already have been allowed TRS based on the interest charged method of calculation.
  • Payment relating to arrears of interest accumulated prior to 1 January 2014* are not eligible for TRS.

*Note that for practical operation of TRS, the date used is 1 November 2013 – see question 5

5. Why are KBC looking two months behind when applying TRS from Jan 2014?

With effect from 1 Jan 2014, the TRS calculation going forward is to be based on interest paid two months previously in order to determine the actual amount of interest paid.

6. If KBC are looking two months behind, will I get a refund at the end of the year if an adjustment is required?

At the end of each year the actual interest paid for that year from January to December will be calculated and if any additional TRS is to be granted, this amount will be paid to you with the next TRS payment following the end of the year.

7. If KBC are looking two months behind, what happens if I close off my mortgage account mid year?

If you pay off your loan, the actual interest paid for that calendar year will be calculated from January of that year to the first day of the month in which your loan is paid off. If any additional TRS is to be granted this will be lodged to the mortgage account before we close the loan and a refund will issue where appropriate.

If you have received too much TRS, this may be recouped by Revenue directly. (See Question 1 above).

8. What happens if I miss a repayment but catch up later in the same year, do I get my TRS for the missed repayment?

If you miss a repayment, e.g. if in January no repayments are made, this results in no TRS being granted for March, paid on 1 April.  However, if you catch up on repayments by the end of the year you may be due additional TRS. This will be applied to your account and paid to you either 2 months after the catch up payment is made or at the end of the year, whichever is earlier.

9. What happens if I miss a repayment and do not catch up later in the same year, do I get TRS for the missed repayment?

TRS will be based on the amount of interest which has actually been paid on the account in a given calendar year (subject to Revenue ceiling and qualifying interest). Therefore, if you do not pay your full required mortgage interest in a tax year you will not receive your full TRS allowance.