Interest Only Decision Reference 2023-0005

• Case Outcome: Rejected
• Reference: 2023-0005
• Date: 16 January 2023
• Year: 2023
• Subject Matter: Interest Only
• Finantial Sector: Banking
• Conducts Complained Of: Failure to implement payment terms

Decision Ref:

2023-0005

Sector:

Banking

Product / Service:

Interest Only

Conduct(s) complained of:

Failure to implement payment terms

Outcome:

Rejected

LEGALLY BINDING DECISION OF THE FINANCIAL SERVICES AND PENSIONS OMBUDSMAN

The background to this complaint is that in November 2000, the Complainants secured a

mortgage loan from the Original Lender for £80,000 (the “Mortgage Loan”).

In August 2003, the Complainants secured a top-up loan of €30,000 with the Original

Lender (the “Top-Up Loan”).

The Provider purchased the Mortgage Loan and Top-Up Loan from the Original Lender on

20 February 2015.

The Complainants’ Case

The Complainants contend that the Top-Up Loan was at all material times, repayable on an

interest-only basis.

The Complainants state that they were offered an interest only loan by the Original Lender

during a phone call in 2003 and were advised by the Original Lender “to fill in the Interest

Only Declaration if [the Complainants] wanted an interest only loan”.

The Complainants state that on 29 August 2003, they signed an interest only declaration

contained in the Top-Up Loan offer letter, which stated that:

“I understand that I will be paying interest only on the Further Advance Loan and

that the original amount of the loan (together with any accrued or unpaid interest)

will have to be repaid on or before the end of my further advance term.”