KBC hikes mortgage interest rates

Tens of thousands of mortgage holders with KBC will have to find more than €300 extra this year to cover the cost of their home loans after the bank announced it was increasing its Standard Variable Rate (SVR) mortgages by 0.25 per cent

From the beginning of March, KBC’s SVR for owner-occupiers will increase from 4.25 per cent to 4.5 while the rate for buy to let customers is going up to 5.15 per cent from 4.90 per cent.

The bank said that while it was “mindful” of the impact the rate hike would have on its customers, it blamed the “continuing high cost of funding mortgages in the Irish market”.

“We recognise that some customers may be concerned about their ability to meet their revised mortgage repayment schedule,” the bank’s chief executive John Reynolds said “We have resolutions in place to assist these customers and our priority at all times is to help customers meet their mortgage repayments to the bank thereby protecting their family home.”

Late last year the Belgian bank opened its first branch in the Republic on Dublin’s Baggot Street and it plans to double its number of mortgage customers over the next three to five years. Its stated objective was to double its mortgage book to 250,000 over the next five years.

The bank, which grew to be the fifth-biggest mortgage lender in the boom with a loan book of €13 billion, but its SVR rates place it towards the upper end of SVR scale offered by Irish banks.

AIB’s rate of 4 per cent is still below the market average of 4.4 per cent. Bank of Ireland has rates of 4.5 per cent while Permanent TSB (another State-owned bank) has moved SVRs the most in recent months and has cut its rates to 4.34 per cent from 5.69 per cent last December.