Not upheld: Account administration errors complaint against Mortgages Plc

Decision detail

Summary

Mrs W and Mr W complained that MPLC failed to credit overpayments on their interest-only mortgage and charged incorrect interest when providing a redemption figure in 2022, resulting in a higher interest rate on their new mortgage. MPLC reviewed the account and explained that interest was calculated daily on the opening monthly balance in accordance with the mortgage contract terms, with payments made during a month not reducing that month's interest charge. The ombudsman examined the mortgage terms, verified MPLC's calculations using specific examples, and found them correct, concluding that Mrs W and Mr W's calculations differed because they used a monthly rather than daily methodology. The ombudsman further held that Mrs W and Mr W could have accepted their earlier mortgage offer before it expired and pursued their complaint simultaneously, making it unfair to hold MPLC responsible for subsequent interest rate increases. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman examined the mortgage contract terms which explicitly stated that interest accrued daily on the balance at the beginning of each month and was charged monthly in advance. The ombudsman verified MPLC's calculations against these contractual terms using specific examples (September 2017 and January 2021) and found them correct. The ombudsman concluded that Mrs W and Mr W's calculations differed because they calculated interest monthly rather than daily. The ombudsman noted that even if MPLC had erred, Mrs W and Mr W could have accepted their earlier mortgage offer and pursued the complaint simultaneously, so it would be unfair to hold MPLC responsible for subsequent interest rate increases on their new mortgage.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website