Not upheld: interest rate variation - failure to reduce rate based on payment record complaint against Evolution Lending Limited

Decision detail

Summary

Mr A complained that Evolution Lending Limited failed to reduce his mortgage interest rate despite maintaining a good payment record since taking out a second charge mortgage in November 2019 at 19.56%. He argued the total cost of credit had become excessive and unsustainable. The ombudsman examined the mortgage offer and terms and conditions, which specified that interest rate variations would only reflect Bank of England base rate changes, changes in funding costs, material adverse changes to security value, or regulatory changes. Finding no provision for rate reductions based on payment record and no evidence Mr A was told this would occur, the ombudsman did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman noted that mortgage interest rate variations are typically linked to base rates or lender costs rather than borrower payment records. While some specialist lending products may reduce rates for improved credit ratings, the documentation for Mr A's mortgage contained no such feature. The terms and conditions explicitly limited rate variations to four specific factors, none of which included payment record. There was no evidence Mr A was told at point of sale that his payment record would influence the rate.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website