KBC cuts fixed mortgages but won't touch high variable rate
Another bank has reduced its fixed rates for new and existing customers, instead of reducing the variable rate for established mortgage holders.
KBC Bank has one of the highest variable rates in the market at 4.5pc.
It is now offering existing customers the option of fixed for between two and five years at rates as low as 3.90pc.
The 3.90pc two-year fixed rate only applies to those who take out a current account with the bank and have their mortgage payments made through this account. Otherwise, the two-year fixed rate is 4.10pc.
Director of products at the bank Eddie Dillon defended the bank's failure to cut its variable rate, arguing that the move in February to allow existing customers get 0.2pc off their mortgage rate for opening a current account was an effective reduction in the rate.
The bank said an existing mortgage customer on a variable rate of 4.5pc can save €1,736 in a year on a €300,000 mortgage by availing of KBC's new two-year fixed rate of 3.90pc, with a KBC current account.
Finance Minister Michael Noonan has set a deadline of tomorrow for banks to respond to his demands for rate cuts.
Permanent TSB is set to announce it will allow its existing customers to avail of cut-price rates that are only given to new customers at the moment.
And Ulster Bank is set to announce lower rates for its existing customers.
Brendan Burgess of the SVR Fair Mortgage Rate campaign said he was not happy with the rate cuts announced so far.
He said KBC was still offering new customers better rates. He is meeting the Mr Noonan on the issue today.