Upheld: Mortgage advice complaints complaint against Quilter Mortgage Planning Limited

Decision detail

Summary

Mr D and Miss Z complained that Quilter's mortgage advice resulted in them losing access to a 1.42% fixed rate mortgage and having to accept 2.19% instead. Quilter had advised them the rate was reserved for 3 months but failed to explain that a formal mortgage offer was required within 90 days to lock in the rate. The application process took longer than expected, causing the rate reservation to expire. Quilter admitted the error and that compensation was due. The ombudsman upheld the complaint and ordered Quilter to pay £18,426.80 (the difference in interest over 5 years), 8% simple interest on monthly payment differences from payment date to settlement, and £500 for distress and inconvenience.

The Ombudsman's reasoning

Quilter admitted the error and that compensation was payable, so the only issue was determining the appropriate remedy. The ombudsman calculated the actual financial loss by determining the difference in interest payments over the 5-year fixed rate period using amortisation calculations. The ombudsman awarded the full difference in interest (£18,426.80) plus 8% simple interest on monthly payment differences from payment date to settlement, as this is standard practice where consumers are out of pocket. The ombudsman rejected claims for capital balance reduction and product fee refund as the interest compensation adequately puts the complainants back in their original position. Compensation of £500 was awarded for distress and inconvenience caused by Quilter's errors.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website