Not upheld: mortgage term extension refusal, interest rate complaints, credit file reporting, mortgage prisoner status, complaint handling delays complaint against Intrum Mortgages UK Finance Limited

Decision detail

Summary

Ms B complained about multiple aspects of her interest-only mortgage administered by Intrum, including refusal to extend the term beyond its December 2025 expiry, allegedly unfair interest rates, credit file reporting of late payments, and complaint handling delays. The mortgage, originally taken in 2005 for £170,000 with a 20-year term, had been transferred between lenders and had no recorded provision for capital repayment. The ombudsman found that Intrum properly refused to extend the mortgage on an interest-only basis without a credible repayment strategy, consistent with FCA regulations, and that its offer to extend only until age 75 on a capital repayment basis was a reasonable commercial decision. The ombudsman rejected other complaints as either outside Intrum's responsibility (the original sale) or factually accurate (late payment reporting), and noted that complaint handling procedures fall outside the ombudsman's remit. The ombudsman recommended Ms B seek independent financial advice regarding refinancing or equity release options.

The Ombudsman's reasoning

The ombudsman applied FCA regulations, particularly MCOB requirements following the Mortgage Market Review, which require lenders to assess credible repayment strategies for interest-only mortgages. A term extension is a material change to mortgage terms, justifying an affordability assessment. Intrum's refusal to extend on an interest-only basis without a credible repayment strategy was consistent with regulatory requirements and fair lending practice. The ombudsman found that Intrum's offer to extend only until age 75 on a capital repayment basis was a reasonable exercise of commercial judgment. The ombudsman distinguished between Intrum's role as lender (not responsible for the original sale conducted by intermediary L) and its role as mortgage administrator. The late payment markers were factually accurate and properly reported. The ombudsman noted that complaint handling procedures fall outside the ombudsman's remit, though Intrum's delay was acknowledged.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website