Santander UK Plc · DRN-6242464

The complaint Mr and Mrs L complain that Santander UK Plc didn’t conduct adequate affordability checks before their mortgage began and that it was mis-sold. They also complain that Santander didn’t check their repayment vehicle before their mortgage was converted to an interest only payment basis, and that it incorrectly reduced the term of their mortgage. What happened Following advice from a third-party broker, Mr and Mrs L took out a mortgage with Abbey National Plc (which later became part of Santander UK Plc) in 2004. They borrowed around £125,000 which was to be repaid over a term of 20 years. Some changes have been made to the mortgage over the years, including to the term, and some of those changes are in dispute. The term of the mortgage ended in 2022, and so Santander expected Mr and Mrs L to repay the outstanding balance of around £68,000. Mr and Mrs L repaid the mortgage around two years later, in 2024, by obtaining an equity release mortgage with another lender. Mr and Mrs L complained about the initial decision to lend to them, the sale of the mortgage and that their repayment vehicle wasn’t sufficiently checked before the mortgage was changed to interest only. Santander didn’t uphold their complaint. It said the mortgage was sold by a broker initially, so Mr and Mrs L would need to direct any concerns about that to the broker. It didn’t give advice at the time of the change of product and to interest only in 2006. And the paperwork from the time stated that Mr and Mrs L should ensure the repayment vehicle they have in place would repay the mortgage at the end of the term. Mr and Mrs L raised some additional points, but Santander said its decision remained unchanged. It said the term of the mortgage was reduced in 2008 as part of a product change and the revised term was confirmed in a completion statement at that time. It said it sent subsequent statements that confirmed the mortgage term and it also confirmed the remaining term on calls with Mr L, highlighting a call that took place in June 2018. Ultimately Santander said that due to the time that’s passed, it’s unable to evidence that changes to the mortgage were not actioned as requested. Mr and Mrs L asked the Financial Ombudsman Service to investigate their complaint. Our Investigator found there was limited information available to show exactly what had happened with the mortgage many years ago. But ultimately, she didn’t think the complaint should be upheld. Mr and Mrs L didn’t agree with that and asked for an Ombudsman to review their complaint. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and

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reasonable in the circumstances of this complaint. I’m very sorry to hear about the difficulties Mr and Mrs L have faced over the years. I’ve taken into account everything they have said when making this decision. As the Investigator has said, some parts of this complaint are time barred. But I can consider whether what’s happened led to lasting unfairness. I don’t consider it did and I’ll explain why. When Mr and Mrs L took out this mortgage in 2004, they did so following advice from a broker. If they are concerned about the advice they received or the suitability of the mortgage, they will need to raise those concerns with the broker directly. I’m sorry to disappoint Mr and Mrs L but I can’t consider those concerns in a complaint brought against Santander as it’s not responsible for the advice they were given. There’s limited information available from the time Santander agreed to lend to Mr and Mrs L in 2004. What I can see is that Mr L was self-employed and his business, which he had owned for around 19 years, had a net profit of £20,000 in 2003. I note that Mr L also self- certified his income – he told Santander how much his annual income was and signed a declaration to confirm it. Santander was entitled to rely on that at the time, and it didn’t need to seek further evidence of his income. Mrs L was noted as being a homemaker on the application form and didn’t have any income to be considered. The application form completed at the time shows that after the new mortgage payment and Mr and Mrs L’s household and other regular expenditure was included, they’d be left with disposable income of around £591. I’m persuaded, therefore, that it was reasonable for Santander to conclude at the time that the mortgage would be affordable for Mr and Mrs L. I’m not persuaded that Santander’s decision to lend to them led to lasting unfairness. In terms of the product change in 2006, Santander has said that the mortgage was changed to interest only terms at this time. There’s limited information available about this and it’s unclear, in my view, whether the mortgage was changed to interest only at this point or had already, in fact, been interest only since its inception. Either way though, Mr and Mrs L complain that Santander didn’t check their repayment vehicle before agreeing to an interest only mortgage. But it wasn’t required to do that and, even if it was, Mr and Mrs L have said they always intended to repay their mortgage through the sale of the mortgaged property and that would have been an acceptable repayment vehicle at the time. I note Mr and Mrs L have shared some concerns about the mortgage balance not reducing between 2004 and 2006. But, as I’ve explained above, it’s unclear whether the mortgage was in fact already interest only. Looking at the monthly payments on the partial mortgage offer Mr and Mrs L have shared dated 2003, it seems more likely that the mortgage was on interest only terms from the start – something that was not unusual at the time. If the mortgage payments between 2004 and 2006 were to be based on repayment terms instead of interest only, they would have been notably higher. I think it’s reasonable to expect that Mr and Mrs L to have done something about it nearer the time, if they thought what they were paying each month was different to what they were expecting, or that the balance of their mortgage was incorrect. In all the circumstances, I’m not persuaded these matters led to any lasting unfairness. I think what’s really at the heart of Mr and Mrs L’s complaint is that they believe Santander incorrectly reduced the term of their mortgage. As with the other matters I’ve considered, the information available about this is very limited. From the information I have seen, the mortgage term was reduced by two years at the time of a product change in around June 2008. It’s difficult to see why Santander would have

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shortened the term in 2008 without reason and without a discussion with Mr and Mrs L. And I can see it wrote to them at the time and confirmed the term was just under 14 years. With the time that’s passed it’s difficult to know why the term was amended. But Mr and Mrs L were sent the completion statement confirming the term and would have been sent statements about their mortgage since then. I note that there were also some conversations between Santander and Mr and Mrs L later on, in which it confirmed the remaining term. If the term was incorrect, I think it’s reasonable to expect that Mr and Mrs L would have raised concerns about it sooner than they did. In any case, what I’m looking at here is whether the reduction of the mortgage term led to any lasting unfairness. And given that Mr and Mrs L repaid the mortgage in 2024 anyway, I don’t think it did. That is, even if the mortgage term should have ended in early 2024, Mr and Mrs L would have been expected to repay it in full by then, not after that. So, I’m unable to agree with their argument that if the term had ended in 2024, then it would have automatically given them more time to sell their property to repay the mortgage. That said, I make no finding on whether Santander handled Mr and Mrs L’s requests to extend the term fairly or not, including their concerns that they were forced to get an equity release mortgage. It doesn’t appear that Mr and Mrs L have raised these issues directly with Santander and so, I’m not persuaded it’s had the opportunity to investigate this matter and provide a response to them. If Mr and Mrs L wish to complain about this then they would need to first complain to Santander. If, once Santander issues its final response (or once eight weeks have passed, if sooner) Mr and Mrs L wish to refer that complaint to us, they will need to do so under a new complaint reference. In conclusion, I’m not persuaded that Santander’s actions relating to the matters I’ve considered led to an unfair relationship during the time Mr and Mrs L held this mortgage. I appreciate this outcome will come as a disappointment to Mr and Mrs L, but I consider it’s fair and reasonable in all the circumstances, for the reasons I’ve explained above. My final decision My final decision is that I don’t uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs L and Mr L to accept or reject my decision before 27 April 2026. Keith Barnes Ombudsman

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