Not upheld: mortgage terms disclosure and fixed rate period clarity complaint against National Westminster Bank Public Limited Company (NatWest)

Decision detail

Summary

Mr S and Mrs C complained to NatWest that their mortgage fixed rate was advertised as five years but actually ran for five years and three months (until 28 February 2027 rather than November 2026), preventing them from repaying without incurring an early repayment charge. The ombudsman found that the fixed rate end date was clearly stated in the mortgage illustration dated 19 October 2021, the mortgage offer dated 8 November 2021, and the online application process, with the offer explicitly stating 'A fixed rate of 0.98% until 28/2/2027' and showing 63 monthly payments. Since the mortgage was taken on a non-advised basis, the complainants were responsible for reading and understanding the terms, and the ombudsman found NatWest had fulfilled all requirements to make the terms transparent. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that the fixed rate end date of 28 February 2027 was clearly stated in multiple documents: the mortgage illustration, the mortgage offer, and the online application process. The offer explicitly stated 'A fixed rate of 0.98% until 28/2/2027' and illustrated 63 monthly payments rather than 60, which would have indicated a set end date rather than a fixed period. Since the mortgage was taken on a non-advised basis, it was the complainants' responsibility to read and understand the terms. The ombudsman noted that offering fixed rates until a set date is an acceptable industry practice, neither right nor wrong compared to fixed periods, provided the documentation is clear. The ombudsman also clarified that most of the additional three monthly payments would reduce capital rather than constitute additional interest cost.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website