Not upheld: refusal to switch mortgage to fixed rate and commencement of possession proceedings complaint against TSB Bank plc

Decision detail

Summary

Mr F complained that TSB unreasonably refused to switch his joint BTL mortgage to a fixed rate in September 2023, resulting in arrears and possession proceedings. The mortgage had been on a 2.49% fixed rate until February 2023, when it reverted to TSB's SVR. A marital dispute marker on the account (due to Mr F and Mrs F's separation in 2022) prevented TSB from switching rates without Mrs F's consent. After Mr F cleared arrears with a £14,000 lump sum in September 2023, no further payments were made to the mortgage, with Mr F using the rental income for his own living expenses. TSB obtained a possession order in May 2025 with arrears of approximately £33,000. The ombudsman found TSB acted reasonably in refusing the rate change and pursuing possession, as the arrears resulted from non-payment rather than overcharging, and upheld TSB's position that without firm repayment proposals, legal action was justified.

The Ombudsman's reasoning

The ombudsman found that TSB was contractually entitled to apply the SVR following expiry of the fixed rate in February 2023. Without Mrs F's consent, TSB could not put a new fixed rate product in place, particularly one with an early repayment charge which would have been detrimental given the risk of possession. The arrears arose not from overcharging but from Mr F's choice to use rental income for his own living expenses rather than mortgage payments. With no regular payments made for several years and no firm proposals for repayment, TSB was justified in pursuing possession proceedings. The ombudsman acknowledged Mr F's difficult personal circumstances but explained that the FOS cannot interfere with court orders and can only assess whether TSB acted fairly and reasonably, which it did.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website