Upheld: Mortgage administration / arrears handling complaint against Barclays Bank UK PLC
Financial Ombudsman decision DRN-6411953 of 2026-06-22T00:00:00+00:00. Mortgage administration / arrears handling complaint against Barclays Bank UK PLC. Outcome: Upheld.
Decision detail
| Reference | DRN-6411953 |
|---|---|
| Decision date | 2026-06-22T00:00:00+00:00 |
| Firm | Barclays Bank UK PLC |
| Product | Mortgage |
| Claim type | Mortgage administration / arrears handling |
| Outcome | Upheld |
| Remedy | Barclays Bank UK PLC must: (1) Refund the early repayment charge paid on redemption of the mortgage, along with 8% simple interest from the date of payment to the date of settlement; (2) Refund the product fee of £999 associated with the rate switch, along with 8% simple interest from the date of payment to the date of settlement. Barclays may deduct income tax from the interest element as required by HMRC and must inform Mr W and Ms L of any deduction. |
Summary
Mr W and Ms L complained that Barclays misled them about a temporary interest-only arrangement on their mortgage. In January 2025, Mr W called Barclays asking about a two-year interest-only product, and the agent incorrectly told him he could apply online for a permanent interest-only switch without explaining it requires a full application and affordability assessment. Mr W and Ms L subsequently applied for a new fixed-rate deal online, which was illustrated on an interest-only basis due to the mortgage charter arrangement still being in place. When the mortgage charter expired in April 2025, their mortgage reverted to capital repayment with higher payments. After being told they did not meet Barclays' lending criteria for a permanent interest-only switch, Mr W and Ms L remortgaged with another lender, incurring an early repayment charge of approximately £14,000. The ombudsman upheld the complaint, finding that Barclays' poor service during the January 2025 call led to an uninformed decision, and ordered Barclays to refund the early repayment charge and product fee with interest.
The Ombudsman's reasoning
The ombudsman found that whilst the mortgage charter documentation and mortgage offer contained information about how the temporary interest-only arrangement would impact illustrations, the critical issue was the poor service provided during the January 2025 call. The agent provided unclear and misleading information by suggesting Mr W could apply online for a permanent interest-only switch without explaining that this requires a full application and affordability assessment. The agent also failed to clarify that the quoted payments were impacted by the temporary mortgage charter arrangement. The ombudsman concluded that had Mr W received proper information during this call, he would have sought advice from a mortgage advisor, discovered he didn't meet affordability requirements sooner, and remortgaged with another lender before being tied into the new fixed-rate product with an early repayment charge. The ombudsman rejected Barclays' argument that the mortgage offer provided sufficient information, noting that the cancellation rights were not clearly communicated and it was unreasonable to expect customers to refer back to documentation from three months prior.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Barclays Bank UK PLC, all decisions | 11,208 | 21% |
| Mortgage administration / arrears handling, all decisions | 13,247 | 19% |
| Mortgage, all decisions | 24,695 | 22% |
Source
Read the original decision on the Financial Ombudsman Service website