Not upheld: mortgage application decline / alleged misleading advice on income acceptability complaint against TSB Bank plc

Decision detail

Summary

Mr and Mrs G complained that TSB unfairly declined their mortgage application after initially indicating they could borrow up to £502,000. They claimed TSB had been clear about Mr G's secondment income from the outset and relied on TSB's assurance to make significant financial decisions, including selling a Buy-to-Let property. When TSB ultimately declined to accept the full secondment income and raised concerns about Mrs G's employment, Mr and Mrs G were forced to seek alternative lending and pay a £10,000 Early Repayment Charge. The ombudsman found that Mr and Mrs G had not clearly disclosed the temporary nature of the income uplift, and that TSB's concerns about both Mr G's secondment duration (confirmed by the employer as less than 18 months) and Mrs G's employment sustainability were reasonable and legitimate. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Mr and Mrs G had not clearly disclosed from the outset that Mr G's income uplift was temporary and dependent on the secondment. While they disclosed the secondment itself, the communications provided did not reflect detailed explanation of how future salary would be determined. The advisor's language about lending 'providing we can evidence incomes' indicated conditions precedent. When the application was formally submitted, the employer could only confirm the secondment for less than 18 months, which was a reasonable basis for TSB to decline to use the full salary uplift in affordability calculations. Additionally, TSB had legitimate concerns about Mrs G's future income sustainability, as her plans changed multiple times during the application process and she had reduced working hours. The ombudsman rejected the argument that TSB misled the customers, and found that even if it had, the customers were not legally obliged to proceed with the purchase and chose to seek alternative lending.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website