Banks admit 130,000 are missing out on cheaper mortgages
Thousands of mortgage-holders are missing out on huge savings by failing to move to lower-priced home loans within their own banks.
KBC Bank said it had now written to 32,000 of its customers twice to tell them they could cut their monthly costs by opting for a cheaper rate within the bank.
Bank of Ireland, AIB, Permanent TSB and Ulster Bank have 100,000 customers between them who could get better rates by just applying for one or submitting a home valuation.
KBC Bank Ireland boss Peter Roebben told the Oireachtas Finance Committee a small number of its customers took up its offer when it wrote to them telling them how to get lower rates.
Customers not signing up for the lower rates are missing out on average savings of €1,800 a year. For a family with a larger mortgage of €300,000, annual savings of €4,200 can be made.
The customers concerned are on a variable rate of 4.25pc, but they could opt for a fixed rate as low as 2.5pc.
The bank charges lower fixed rates for those with more value built up in their homes, so-called loan-to-value pricing.
Even those with a loan-to-value of more than 90pc could get a fixed rate of 3.7pc, if they also sign up for a KBC current account.
The other lenders have revealed to the committee that around 100,000 of their customers could get better rates without moving bank.
All customers need to do is apply for a lower fixed rate, or submit an up-to-date valuation to avail of a lower rate based on their loan-to-value rate.
Founder of personal finance website Askaboutmoney.com Brendan Burgess said the savings that could be made were "staggering".
Fianna Fáil finance spokesman Michael McGrath said there were 35,000 Permanent TSB customers paying a variable rate of 4.5pc.
Bank of Ireland has 47,000 mortgage-holders on variables of between 3.9pc and 4.5pc. They could get a one or two-year rate of 2.9pc.
Some 17,000 Ulster Bank customers are still paying a variable rate of between 3.5pc and 4.3pc. Almost all of these would qualify for a two-year fixed rate of 2.3pc, and all can avail of some rate reduction.
Mr McGrath said most AIB variable-rate customers had not submitted a revised valuation to get a better rate.