Partially upheld: mortgage term extension refusal, bankruptcy marker delay, premature legal referral, interest rate product access complaint against Santander UK Plc
Financial Ombudsman decision DRN-6402587 of 2026-06-08T00:00:00+00:00. mortgage term extension refusal, bankruptcy marker delay, premature legal referral, interest rate product access complaint against Santander UK Plc. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6402587 |
|---|---|
| Decision date | 2026-06-08T00:00:00+00:00 |
| Firm | Santander UK Plc |
| Product | Mortgage |
| Claim type | mortgage term extension refusal, bankruptcy marker delay, premature legal referral, interest rate product access |
| Outcome | Partially upheld |
| Remedy | Santander UK Plc directed to pay Mr and Mrs P total compensation of £450 (£250 for bankruptcy marker delay and £200 for premature referral to solicitors). Santander should give fair consideration to any further term extension applications from Mr and Mrs P. |
Summary
Mr and Mrs P complained that Santander unfairly refused to extend the interest-only part of their mortgage and treated them poorly regarding a bankruptcy marker that remained on their account. The mortgage had £384,000 on interest-only terms due to expire in 2023, with Mr P having been made bankrupt in 2018 (discharged 2022). Santander extended the repayment part in 2022 as forbearance but refused to extend the interest-only part, citing policy requirements for Official Receiver confirmation and age limits. The ombudsman found Santander's refusal was reasonable as later extension requests were not forbearance-related and required full application, and that Santander did not guarantee or mislead about extension possibilities. However, the ombudsman upheld the complaint in part, finding Santander was premature in referring the account to solicitors in December 2024 (only two months after the bankruptcy marker was finally removed in October 2024) and should have communicated more clearly about why the marker could not be removed earlier. The ombudsman directed Santander to pay £450 total compensation (£250 for the marker delay and £200 for the premature legal referral).
The Ombudsman's reasoning
The ombudsman found that Santander's refusal to extend the interest-only mortgage was reasonable because: (1) the 2022 extension of the repayment part was forbearance to address affordability, but extending interest-only would have extended the term beyond Santander's age 70 policy limit; (2) later requests for extension were not forbearance-related and required full application; (3) Santander's policy requiring Official Receiver confirmation before considering applications was reasonable; (4) Santander did not guarantee or mislead about extension possibility; (5) refusing new interest rate products was reasonable to avoid early repayment charges on an expired term; (6) the £250 compensation for bankruptcy marker delay was appropriate given no specific repayment plan was provided; (7) Santander was premature in referring to solicitors in December 2024 given the marker was only removed in October 2024, warranting additional £200 compensation; (8) 'best interests' considerations under MCOB 11.7.3 did not apply as Mr and Mrs P provided no specific repayment plan.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Santander UK Plc, all decisions | 14,406 | 22% |
| Mortgage, all decisions | 25,098 | 22% |
Source
Read the original decision on the Financial Ombudsman Service website