We look at Patricia's complaint about her mortgage lender's decisions to turn down her application to move her mortgage due to a change in their policy.
Patricia took out a five-year fixed rate mortgage deal. Three years later she wanted to move house. She asked to port (that is, transfer her interest rate and product terms to a new mortgage on a different property) her fixed rate product.
But the lender turned down Patricia's application, saying she didn’t meet their new criteria. Patricia had to remortgage with another lender and as a result, she got an early repayment charge. Patricia hadn't anticipated this cost and had to take out a personal loan to pay the charge.
The lender had turned down Patricia’s application because it had changed its lending policy, and no longer approved mortgages if the borrower would be over 80 by the time the mortgage was repaid.
Putting things right
We didn’t think it was fair for the lender to apply the charge in these circumstances. The fixed rate was portable, Patricia wasn’t asking to borrow any more money or make any other changes to her mortgage, and we didn’t think Patricia could have foreseen that the lender would change its age limit. So we told the lender to refund the early repayment charge, along with the costs Patricia faced to repay the personal loan.