Worried about rising interest rates, Meena decided to pay an early repayment charge so that she could switch mortgage deals.
What happened
Meena had a fixed-interest rate on her mortgage with about a year left to go, but was worried about rising interest rates. She wanted to switch mortgage deals to a new interest rate even though she’d have to pay an early repayment charge.
She arranged an appointment with a mortgage adviser at her lender’s branch to make the application. But after the appointment decided not to go ahead.
Nine months later, when Meena took out a new rate she realised the rates available were much higher than they’d been when she’d spoken to the adviser. She complained she’d been talked out of making an application, which had left her worse off.
Meena wasn’t satisfied by her mortgage lender’s response to her complaint so brought her case to us.
What we said
We listened to the recording of the conversation Meena had had with the mortgage adviser. It was clear that before the appointment she’d made up her mind to pay an early repayment charge so that she could lock into a rate earlier.
However, Meena changed her mind because of what happened at the appointment.
We didn’t think the mortgage lender had acted fairly. The adviser had talked Meena out of applying to switch mortgages, in part by making predictions about future interest rates. He also hadn’t calculated the impact of the early repayment charge properly.
If Meena had been given better advice, we thought it was unlikely she would have delayed applying for a new interest rate.
To put things right, we told the mortgage lender to recalculate Meena’s mortgage. We asked them to adjust it as if she’d taken a new interest rate when she had that first appointment rather than a year later.