Not upheld: Mortgage advice complaints complaint against Saffron Building Society

Decision detail

Summary

Mrs H complained that Saffron Building Society unfairly declined her request in April 2022 to switch her mortgage to a fixed interest rate product. Mrs H had lost her job in January 2020, received a payment deferral until August 2020, and subsequently accrued arrears until clearing them in May 2022. Saffron declined the switch based on arrears in the past 12 months and its lending criteria requiring six months clear of arrears. The ombudsman found that Saffron acted fairly given Mrs H's recent missed payments, increased borrowing with other lenders, and higher financial commitments, as a fixed-rate product with early repayment charges could have been detrimental to her financial position. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Saffron's requirement for a six-month arrears-free period before product switches is reasonable practice to ensure customers can meet contractual repayments. Mrs H's repayment history showed she had struggled to meet payments on and off for two years, with missed payments only months before her request. While the ombudsman acknowledged Mrs H's difficult circumstances, the combination of her recent arrears, missed payments, increased borrowing, and higher outgoings meant that locking her into a fixed-rate product with early repayment charges could have been detrimental to her. The ombudsman rejected the argument that Saffron should make an exception simply because it had done so previously.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website