Mortgage interest rates
Do you deal with customer complaints about mortgage interest rates for mortgage providers, lenders, brokers, advisers or other financial businesses?
This page will give you an overview of how we approach complaints about how interest rates have been applied to mortgage products.
On this page
Do you have a mortgage complaint?
Complaints we deal with
Consumers may come to us when they’re unhappy after trying to arrange a new interest rate for their home loan. The complaints we regularly see include when:
- the lender or broker caused delays, which meant the consumer ended up with a higher interest rate
- the consumer didn't know they could arrange a new interest rate, or weren't given enough notice that their interest rate product was about to end
- there was another reason why the consumer couldn't arrange a new interest rate product, such as being in arrears or the joint party to the mortgage wouldn’t agree
- their lender doesn’t offer new interest rate products, so they’ve become a ‘mortgage prisoner’
Rules on mortgage interest rates
When we look at complaints about the mortgage rates, we use the regulatory and legal standards that applied at the time of the event that the consumer is complaining about.
The Mortgages and Home Finance: Conduct of Business sourcebook (MCOBs) sets out how mortgage lenders should provide services to borrowers, covering regulated:
- mortgage contracts – including first and second charge mortgages and bridging loans
- equity release products
- home purchase plans, and
- sale and rent back agreements
In 2023, around 90% of mortgage lenders signed up to the Mortgage Charter. If the complaint you’re handling involves one of these lenders, then they are subject to the standards set out in the Charter.
Handling mortgage rate complaints before they come to us
Good complaint handling can repair a relationship, build confidence in financial services, and help customers understand your financial products. We'd expect your complaint handling teams to fully understand:
- all the relevant rules and regulations, including the requirements of the Consumer Duty
- what to send us when we're dealing with a complaint about your firm.
Our decisions database holds all the final decisions we’ve published since 1 April 2013. They're anonymised to protect the identity of complainants but are based on real-life complaints, so will give you a good picture of how we resolve disputes.
Our complaints data will give you an idea of the volume of complaints we receive and resolve, and the proportion that we have upheld in consumers’ favour.
How we resolve mortgage rate complaints
We only look at complaints you've had an opportunity to look into first. If the consumer is unhappy with your decision, or you don't respond to them within the time limits, they can come to us.
Each case is different, so what we require will vary. But we’ll look at the facts and evidence from both you and your customer. We’ll usually consider:
- relevant laws and regulations
- regulators’ rules in place when the event happened, including the Consumer Duty
- guidance, standards and codes of practice in place at the time of the event, such as the FCA’s MCOB rules
- the original mortgage offer and terms and conditions
- details of any changes to the interest rate since, such as new products or variations to the rate
- details of any application your customer has made – such as the application form, selection or advice letter, details of the decision you made, contact notes and call recordings
- any communications you sent your customer about changes to their interest rate and whether or not they were able to take a new one
- if you have refused a rate to this customer, confirmation of whether you offer rates more widely and if so an explanation of why this customer wasn’t eligible
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We’ll look at whether you:
- gave reasonable notice to the borrower that their payment would be changing, perhaps because their fixed-rate product was ending
- considered any requests from the borrower for a new interest rate product
- actioned requests promptly, without avoidable delay – particularly when interest rates were rising – and if you did cause a delay, how you tried to put things right
- gave enough clear and factual information to any consumer arranging a product on an execution-only basis, so they could make an informed decision
- ensured the consumer could access and easily use any tools or communication channels that you provided to arrange rates
- made sure you didn’t offer different rates to customers with similar characteristics – such as loan to value and credit history – without good reason
- made a suitable recommendation to the consumer based on their needs and circumstances at the time, if you were giving advice
- you ensured there were no unnecessary barriers to arranging an interest rate product – for example by conducting affordability checks when there wouldn't be an impact on affordability
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We’ll look at whether:
- you made a suitable recommendation – based on their needs and circumstances at the time – including by understanding the lender’s criteria and whether the customer was likely to meet them
- the information you gave was clear, balanced and in no way misled them, so that they were able to make an informed decision
- you progressed applications within a reasonable time and without avoidable delay – including by resolving follow-up queries and liaising between customer and lender
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If your customer is switching to a higher rate, you should have calculated whether they can really afford it. You can do this by:
- comparing the proposed new rate with the reversionary rate you’d apply if a rate was refused
- assessing their financial circumstances
It’s not generally in the customer’s best interests to offer them a product they can’t afford, especially if this ties them in, for example with an early repayment charge.
See guidance on our approach to complaints about:
If we uphold a consumer's complaint, we'll tell you what you need to do to put things right. We may also ask you to compensate them for any distress or inconvenience they’ve experienced as a result of the problem.
Case studies
Freya wanted to switch mortgage before the end of her fixed-term deal
Mortgages Interest
Keith wanted more notice that his fixed-term mortgage deal was about to end
Mortgages Interest
Meena felt she’d been badly advised about switching to a lower rate
Mortgages Interest
Business Support Hub
Businesses and consumer advisers can contact our Business Support Hub on 020 7964 1400 for information on how we might look at a particular complaint, or for guidance on our rules and how we work.
We also work with businesses and other organisations to help prevent complaints.
