Not upheld: mortgage rate change without consent / lack of proper authorization complaint against Principality Building Society

Decision detail

Summary

Miss B complained that Principality Building Society changed her joint mortgage to a fixed rate without her consent. In January 2023, Miss B had explicitly told Principality she did not want a rate change, but in March 2023 Principality issued and completed a five-year fixed rate offer at 4.65%. Miss B discovered this in July 2025. Although Principality accepted it should not have made the change, the ombudsman could not order the rate to be reversed because Miss B's ex-partner is jointly liable, makes the payments, and is not party to the complaint. The ombudsman found Miss B has not suffered quantifiable financial loss and upheld Principality's offer of £150 compensation.

The Ombudsman's reasoning

While Principality should not have applied the fixed rate without Miss B's agreement, the ombudsman could not order the rate to be removed because Miss B's ex-partner is jointly and severally liable for the mortgage, is not party to the complaint, and is the one making payments. Removing the fixed rate would prejudice the other borrower by exposing them to the higher SVR. The ombudsman found Miss B has not suffered a quantifiable financial loss at present, as the fixed rate actually reduces monthly payments and does not prevent a property sale or affect equity division. Any ERC loss is hypothetical and would only become a complaint if actually charged.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website