Not upheld: Mortgage administration / arrears handling complaint against Mortgages Plc

Decision detail

Summary

Mr L complained that his interest only mortgage balance increased from £65,944 to £70,300 by the time of redemption in 2023, and that the mortgage was mis-sold without adequate explanation. Mortgages Plc declined to investigate the mis-sale complaint as it was too long after the 2006 sale. The ombudsman found that jurisdiction existed only for post-October 2017 administration issues. The ombudsman determined that the balance increase was due to Mr L's multiple missed and late payments throughout the mortgage term, which correctly resulted in unpaid interest being added to the balance. No errors were found in the redemption calculation or the two charges applied since October 2017, and the complaint was not upheld.

The Ombudsman's reasoning

The ombudsman determined that an interest only mortgage balance should remain constant only if all payments are made on time. Since Mr L made multiple late and missed payments throughout the mortgage term, the unpaid interest was correctly added to the balance. The ombudsman found no calculation errors in the redemption figure and confirmed that both charges applied since October 2017 were fair and properly disclosed.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website