Worried about rising rates, Meena was considering paying an early repayment charge to switch mortgages but says her lender’s advice left her worse off.
What happened
Meena had a fixed interest rate on her mortgage with about a year left to go, but she 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, she decided not to go ahead.
Nine months later, when Meena took out a new rate, she realised the rates available were much higher than 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 with her mortgage lender’s response to her complaint, so she brought her case to us.
What we said
We listened to the recording of Meena's conversation with the mortgage adviser. It was clear that before the appointment, she’d decided to pay an early repayment charge to lock into a new rate. But the adviser discouraged her, partly by predicting future rates and partly by not fully explaining the financial impact of the early repayment charge.
We didn’t think the mortgage lender had acted fairly. The adviser talked Meena out of applying to switch mortgages, which wasn’t appropriate for her situation. He also hadn’t properly calculated the impact of the early repayment charge.
If Meena had been given better advice, it was unlikely she would have delayed applying for a new interest rate. To put this right, we told the mortgage lender to recalculate Meena’s mortgage as if she’d taken the new interest rate at her first appointment a year earlier.