Patricia’s mortgage lender turned down her application to transfer her mortgage because it had changed its lending policy.
What happened
Patricia took out a five-year fixed-rate mortgage deal. Three years later she wanted to move house and asked to change her fixed-rate product. She wanted to transfer her interest rate and product terms to a new mortgage on a different property.
The lender turned down Patricia’s application, saying she didn’t meet its new criteria. 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.
Patricia had to remortgage with another lender and, as a result, she had to pay an early repayment charge. Patricia hadn’t anticipated this cost and had to take out a personal loan to pay the charge.
What we said
We reviewed what happened and didn’t think it was fair for the lender to apply the charge in these circumstances. Patricia’s fixed rate mortgage was portable. And she wasn’t asking to borrow any more money or make any other changes to her mortgage.
We didn’t think Patricia could have foreseen that the lender would change its age limit policy. So we upheld Patricia’s complaint. We told the lender to refund the early repayment charge and any additional costs she had incurred as a result - taking account of the cost of the personal loan and any difference in the interest rate between her old and new mortgages.