Guest house owner complains when her bank wouldn't grant her a payment holiday


Claire came to us after her bank had turned her down for a mortgage payment holiday because of Covid-19.

What happened 

Claire was a guest house owner, and because of the Covid-19 pandemic and government restrictions at the time, had lost all her bookings. With the sudden and total loss of all her revenue, she couldn’t afford to pay her mortgage on the property, in which she also lived. So she asked her bank for a mortgage holiday.

Claire said she knew other businesses in the area who had been granted payment holidays. However, her bank told her she wasn’t eligible and offered a loan instead. Unhappy with this outcome, Claire came to us for advice.

What we said

When we spoke to the bank, it explained Claire hadn’t yet raised a complaint. But it agreed to work with us to address her concerns given the urgency of the circumstances.

The bank explained its position – which was that mortgage holidays were intended for residential properties, while commercial properties and businesses were eligible for different government schemes.

We explained that eligibility for mortgage payment holidays wasn’t limited to residential customers, which meant Claire might be eligible, depending on her other circumstances. The bank apologised, explaining the challenges they’d had in adapting to the new FCA guidance at short notice. They said they would change their approach from now on.

We thought this a fair and reasonable outcome – meaning that not only was Claire’s problem resolved quickly, but further complaints arising from the same error would also be prevented.