Not upheld: incorrect interest rate application and causation of financial loss complaint against Santander UK Plc

Decision detail

Summary

Mr J complained that Santander's failure to apply a lower interest rate to his interest-only mortgage caused his 2022 property sale to fall through due to insufficient proceeds. In 2025, Santander acknowledged the error and made a rebate of over £40,000. The ombudsman accepted that Santander treated Mr J unfairly but found no sufficient evidence that the sale would have proceeded even with the lower balance, as contracts had not been exchanged. The complaint was not upheld, and the ombudsman declined to order a backdated redemption statement.

The Ombudsman's reasoning

While Santander's failure to apply the lower interest rate was acknowledged as unfair treatment, the ombudsman found insufficient evidence to conclude that the 2022 sale would have proceeded even if the mortgage balance had been lower. Since Mr J had not exchanged contracts, the sale could have failed for numerous other reasons. The ombudsman declined to make a speculative finding that the sale would have completed based solely on the lower balance.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website