Does anyone here have a good understanding of bank wholesale rates?
KBC offer a 10 year fixed mortgage at (what appears to be) a competitive rate (2.95% for LTV below 50%).
The penalty for breaking the fixed term early involves subtracting the wholesale rate at the time of the break (for the remaining term) from the wholesale rate at the start of the fixed term and multiplying it by time remaining and principal - so as long as the wholesale rate is higher at time of break, no penalty applies.
My thinking is that the 10 year fixed mortgage looks like a good bet in that the penalty will likely be zero for breaking early but I don’t know enough about wholesale rates to be sure about this.
KBC’s definition of ‘Wholesale rate’: 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.