TSB Bank plc · DRN-6320693

The complaint Mr and Mrs G complain that TSB Bank plc unfairly turned them down for extra borrowing, after it told them they could secure it. They said that meant they had to pay an Early Repayment Charge, which they wanted TSB to pay back, along with other compensation. What happened Mr and Mrs G said they had a mortgage with TSB, and they wanted to move house. That would mean porting their existing mortgage, but also applying for new borrowing. Mr and Mrs G said they had been talking to TSB for a while about what they could do, and how much they could borrow. They said Mr G was on secondment, and wanted to use that income to support the purchase. Mr and Mrs G were adamant that they had been clear from the outset about the nature of Mr G’s employment. And they said knowing that, TSB said they could borrow up to £502,000. Mr and Mrs G said they relied on this information, and took steps to make sure they fit within TSB’s other lending criteria. That included having to sell one of their BTL properties, because TSB places a limit on how many of these its mortgage applicants can own. Mr and Mrs G said they were then told the application had been rejected by the underwriter. They said TSB claimed this was because of Mr G’s long-term secondment, which TSB deemed ineligible for its affordability calculations. Mr and Mrs G said this was deeply unfair, they had been clear about Mr G’s income from the outset, and had relied on what TSB previously said about this. Mr and Mrs G said when it looked like they would not be able to borrow what they wanted from TSB, they talked to a broker. That broker tried to help resolve the problems with TSB, without success. Mr and Mrs G said they even changed properties, looking to buy somewhere cheaper, but TSB just kept putting hurdles in their way. They said they had been assured they met affordability for this new, cheaper property. But then TSB asked a flurry of questions about Mrs G’s employment, and whether she could continue to commute to work from her proposed new home. Mr and Mrs G said TSB even asked for letters from a new employer that Mrs G hadn’t even applied to yet. Mr and Mrs G said that TSB hadn’t been concerned about the same commuting distance for Mr G, when they moved the last time. Mr and Mrs G said they felt they had no option but to seek a mortgage with a different lender. But they were tied in to an existing fixed rate on their TSB mortgage, so they said they had to pay TSB around £10,000 in an Early Repayment Charge (“ERC”) just to move. Mr and Mrs G said this had resulted in numerous additional costs for them, not just the ERC, and it had enormously increased the stress of their move. They wanted our service to look into things for them. Mr and Mrs G said they had since made a subject access request to TSB, but they said TSB

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hadn’t fulfilled their request, they thought some information had been withheld. Mr and Mrs G said they had referred this to the Information Commissioner’s Office. When TSB replied to Mr and Mrs G’s complaint, it said it wasn’t aware that Mr G’s additional income came from a secondment when he first supplied his payslips. It was only after Mr and Mrs G’s offer was accepted that their advisor could submit their full application, in November 2024. When the mortgage processing team looked at this, it said the additional income wasn’t guaranteed over the term of the mortgage. The advisor liaised with Mr G’s employer, but it wasn’t possible to show that Mr G would continue to earn this much throughout the mortgage term. The underwriters then asked about another allowance on Mr G’s income, and also about Mrs G’s current and future employment. Mr and Mrs G resubmitted their application through a broker, but TSB said it wasn’t able to be clear about Mrs G’s future employment. TSB said it didn’t know whether she would continue to work in her old role, or transfer to another job closer to the new property. TSB said that Mr and Mrs G then withdrew their application, and subsequently moved their borrowing elsewhere. TSB said that moving their mortgage triggered the payment of an ERC. Mr and Mrs G knew when they took out their mortgage deal that an ERC would be payable until 2028, so TSB didn’t think charging that money was a mistake, and it said it wouldn’t pay that back. TSB said it thought it had complied with the subject access request, and it would cooperate with any investigation by the Information Commissioners’ Office. When our service asked TSB about this complaint, it added some further information to the above. It said that, although Mr G had told its mortgage advisor he was on a secondment, he also said the income from this secondment was guaranteed for many years to come. TSB said it had tried to confirm this with his employer, and had not been able to confirm that the secondment would continue for more than another two years. So it wasn’t able to accept the sizeable uplift in Mr G’s income that he received through this secondment, as an ongoing source of income available to support repayment of the mortgage over the whole term. TSB also explained its concerns about Mrs G’s employment. It said it had initially understood Mrs G worked at home, but then it seemed her role may be hybrid, although TSB said it wasn’t clear how Mrs G’s work could be done at home, and her role appeared to involve on- call and weekend hours. The commute from their proposed new home would be some hours each way. TSB said when it asked Mr and Mrs G about this, they said Mrs G would commute when needed in the office, and stay with friends. But then Mr and Mrs G said Mrs G was going to transfer to a new role within the same employer, closer to her new location. When TSB asked about this, Mr and Mrs G weren’t able to show that Mrs G did have a new job closer to where she lived. So TSB said there must be some doubt over whether Mrs G’s existing income was going to continue. It was at this stage that the application was cancelled. Our investigator didn’t think this complaint should be upheld. He said TSB had declined this application in line with its lending criteria. Mr and Mrs G didn’t agree. They didn’t think their complaint had been understood. They said they had been wrongly advised at the outset, and that caused a financial detriment. Mr and Mrs G said they had, in the initial and subsequent meetings with TSB’s mortgage

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advisor, been clear about the nature and duration of the income one of them was drawing from a secondment. They said the advisor was explicit that this would not be an issue for their application. They said they ought never to have been told this was acceptable, when it was not. Mr and Mrs G said that because they were told Mr G’s secondment was acceptable, they went ahead and placed their property on the market, secured buyers, and committed to purchasing another property. They also sold a BTL property, to comply with TSB’s limits. Then they were told Mr G’s secondment income wasn’t acceptable. Mr and Mrs G said they either had to allow the whole property chain to collapse, or go ahead with their sale and purchase by securing a mortgage elsewhere, paying the ERC that TSB would charge. So they said they were forced into getting a mortgage elsewhere, by the poor advice TSB gave at the outset. Mr and Mrs G said our service frequently upholds cases where the customer was advised consistently throughout the application, relied on that advice to their cost, then this was reversed at a very late stage. And they said that was what had happened here. So they thought our service should ask TSB to refund their ERC, reimburse the wasted costs, put them back in the position they would have been in if the wrong advice hadn’t been given, and pay compensation. They said a number of legal principles supported this approach. So they wanted the investigator to think again. Mr and Mrs G sent us a number of emails, which they said constituted evidence of their conversations with TSB’s mortgage advisor, and showed that there had been a number of references to Mr G’s secondment in the emails between the advisor and them. Our investigator raised this with TSB, but it continued to say it had done nothing wrong. TSB reiterated its earlier position, that it had not been able to verify what Mr G had said about his existing income, including an uplift from a secondment being guaranteed well into the future. TSB also repeated that there were a number of other concerns with this application, including that it didn’t appear practicable for Mrs G to stay in her old job after the house move, and she had not yet secured other employment. Our investigator didn’t change his mind. He still thought that TSB had refused the application in line with its policy. Mr and Mrs G said we still hadn’t looked into the issue they had raised, following the investigator’s first findings, and repeated that when we did that, they expected this complaint to be upheld. They wanted this complaint to be considered by an ombudsman, so it was passed to me for a final decision. I then considered this case, and I reached a provisional decision. My provisional decision I issued a provisional decision on this complaint and explained why I didn’t propose to uphold it. This is what I said then: I’ve reached the same overall conclusion on this complaint as our investigator. However, I can’t see that Mr and Mrs G have been given all the detail of the explanation TSB set out for our service, about why their application for more borrowing didn’t go as they expected. So this decision will be provisional, I’ll set out the reasons for it, and give both sides a chance to respond before the decision is finalised.

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I think it’s worth summarising the positions of both sides briefly, before I start to look at this. Firstly, I understand that Mr and Mrs G have not asked our service to look into any breach of their data protection rights. They told us they have referred this elsewhere instead, so I have not considered that as a separate head. Mr and Mrs G say they were clear with TSB from the outset on the source of Mr G’s income, and TSB initially said secondment income wasn’t a problem. They relied on this, to their financial detriment, but then TSB wouldn’t accept that income. They said TSB then raised spurious concerns about Mrs G’s employment, and dragged its heels to the extent that they were forced to seek alternative lending. So charging the ERC isn’t fair, and TSB needs to repay this, as well as taking other steps to put things right. TSB says something else. It says the problem wasn’t that Mr G’s income came from secondment. It said Mr G had told its advisor this income was guaranteed in the long term, and she provided an estimate of lending on that basis. But when the application was submitted, TSB hadn’t been able to confirm that Mr G’s income uplift was going to continue for many years to come. This is why it wasn’t able to take all of the income Mr G was earning at the time, into account for his mortgage application. TSB also said that it wasn’t clear Mrs G’s job could be done remotely, and the distance was really too great for regular commuting. TSB said that when it asked about this, Mr and Mrs G gave conflicting answers, which called into question whether TSB could rely on Mrs G’s existing salary continuing too. So TSB didn’t think it could lend what Mr and Mrs G wanted. There is, as both sides are aware, no direct evidence of the conversations between TSB’s mortgage advisor and Mr and Mrs G. So I have considered the additional, supporting evidence carefully. That consists both of the recollections of Mr and Mrs G, and TSB’s advisor, as well as the underwriter’s contemporaneous notes of the application as it was referred to them. Mr and Mrs G sent us emails which showed they told the advisor in May 2024 that Mr G was now on secondment, and gave his salary. In September 2024, Mr G emailed to say he’d had a pay increase. I can’t see anything in these emails to suggest that some of Mr G’s income is dependent on being on secondment, or how long he envisages this secondment will last. TSB’s advisor recalls Mr G saying his secondment would last for several years into the future, but TSB said when the application was submitted, it wasn’t able to confirm this. Importantly, I can see that TSB’s advisor was careful to say, when giving a figure for possible future lending “we can lend up to £502k providing we can evidence incomes, BTL incomes etc and no changes to expenditure, etc on the agreement in principle”. I think that’s important for two reasons. One is because it supports what the advisor said about Mr G’s income not yet being confirmed in September 2024. And the other is that TSB’s advisor appears to have been careful, even in informal communications, to make sure Mr and Mrs G understood there would be a number of further steps before any lending could be confirmed. Ultimately, TSB’s underwriter said Mr G’s employer did explain that his existing salary was subject to an uplift while he was on secondment, but could only confirm the secondment for less than eighteen months into the future. Whether or not that fits with Mr G’s understanding, I don’t think it’s unreasonable for TSB to have relied on what Mr

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G’s employer said, and then to have used the lower salary figure that Mr G would apparently be expected to revert to if his secondment were to end, in order to work out how much it could lend to Mr G. TSB said it also had concerns about Mrs G’s employment, and whether she could really continue in her existing job (which it said didn’t appear to be fully remote) once she lived a much longer distance away. Mr G said he previously had an equivalent commute which TSB wasn’t concerned about, but I don’t think TSB is bound to take the same view here. And I do think it was fair and reasonable for TSB to be concerned about this. Mr and Mrs G renewed their application through a broker, but unfortunately TSB said it still couldn’t use all of Mr G’s secondment income, and it was unable to resolve the concerns about Mrs G’s job. Mr and Mrs G then decided to seek other borrowing. Mr and Mrs G’s argument rests on TSB having misled them about the income they could rely on, as part of their mortgage application, giving firm reassurances that later turned out to be wrong. I haven’t been able to see that this is what’s most likely to have happened here. Mr and Mrs G say they then had no option but to pursue different lending. But it doesn’t seem as if they were legally bound to go ahead with this house purchase at this point. So it’s not clear to me that, even if I thought TSB had misled them (which I’ve explained I don’t think is most likely) that I could then say they did in fact need to seek alternative borrowing. It appears they chose to do so, to go ahead with a purchase they wished to make. I understand Mr and Mrs G would feel obliged to continue with the sale and purchase at that point, if they could, and that they may well have felt strongly they needed to move. But if they weren’t actually obliged to do so, and chose to move their mortgage, that also means it would be difficult for me to fairly and reasonably ask TSB to pay the costs of that. I know Mr and Mrs G will be disappointed, but I don’t think this complaint should be upheld. I invited the parties to make any final points, if they wanted, before issuing my final decision. Both sides responded. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. TSB wanted to stress that it had reduced the possible borrowing because Mr G’s income could not be guaranteed into the future. And it asked for an employment reference for Mrs G’s new job, as it had for the previous application when Mr and Mrs G had relocated. TSB said Mr G’s commute back then had been covered by his employer, so wasn’t a cause for concern. But this time, Mr and Mrs G had initially said Mrs G would be working from home. When the underwriter queried how Mrs G, whose job title said she was a laboratory worker, could do that, TSB said conversations then became difficult. TSB said it had made clear before Christmas 2024 that if Mrs G was working full time and had a new job offer, that would assist with affordability, but the loan they wanted was not affordable without her income. TSB said Mr G’s secondment could not be shown to be a permanent position, and Mrs G had reduced her working hours after summer 2024, which also affected affordability. So TSB still didn’t think it had made a mistake over this application.

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Mr and Mrs G wrote at length to object to the provisional decision. In line with the informal nature of our service, I have summarised this more briefly below, but I would like to reassure Mr and Mrs G that I have read and considered their representation in full. Mr and Mrs G said they felt this complaint turns on whether they were given misleading advice at an early stage that secondment income was acceptable, and whether they reasonably relied on that understanding to their detriment. Mr and Mrs G didn’t think I’d properly weighed the evidence, and said they had more evidence for our service to consider. Mr and Mrs G said they thought I was looking at whether TSB acted within its lending criteria when declining the application, when I should be considering whether TSB misled them. Mr and Mrs G said they had disclosed Mr G’s secondment from the outset, and had been reassured that this would not present an issue, but then it did. Mr and Mrs G said they had been turned down for lending because Mr G’s income was temporary in nature. They didn’t think TSB’s caveats about evidencing income could possibly cover that. And they said if TSB had made this clear from the start, they would have taken different decisions. Mr and Mrs G said they had disclosed Mr G’s secondment early and consistently, they had made significant financial decisions on the basis that this income would be acceptable, and they said there was no evidence they were warned TSB wouldn’t accept this income. Mr and Mrs G said by saying they were not yet obliged to go ahead with their purchase by the time TSB refused to lend the full amount, I was applying an unduly narrow interpretation of causation. They felt that although it may have been technically possible to withdraw at that point, this would have resulted significant financial and personal consequences. So, practically speaking, they felt they had no reasonable alternative but to proceed. Mr and Mrs G also said they’d secured new evidence, and they argued this not having been disclosed before, undermined what TSB had said. They said this evidence made them concerned about TSB’s objectivity in assessing their application. They still didn’t think disclosure had been complete, and they wanted our service to ask for unredacted versions of the internal messages TSB had exchanged about their application. They felt that was necessary to ensure that the decision was based on a complete and accurate evidential record. They also said TSB may have recorded its conversations with them, and if so, they thought I should get these recordings too. Mr and Mrs G said that TSB’s concerns about whether Mrs G could commute were applied inconsistently, as TSB had no such concerns on Mr G’s earlier application. They thought this might be a result of gender bias. Mr and Mrs G said they still argued they had been misled, but as a fallback they wanted me to consider whether TSB’s overall handling of the application had placed them under so much pressure, that it was fair and reasonable to ask TSB to pay compensation, and to contribute to their financial loss, especially the ERC. Our service has already asked TSB if recordings of its conversations with Mr and Mrs G exist. TSB says not, and its response here is consistent with our service’s experience in applications made via a branch, with this lender and others. I understand Mr and Mrs G may want me to look very deeply into the documentation that TSB may have about their application, but I do think our service has sufficient evidence to resolve this complaint.

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Mr and Mrs G said the key question was whether they were misled. But this suggestion that TSB misled them, depends on the assumption that Mr and Mrs G had been quite clear, from the outset, about their circumstances, including the temporary nature of Mr G’s salary uplift, and TSB provided incorrect advice on that basis. And that’s not what I think is most likely to have happened here. For the avoidance of doubt, I haven’t been able to see that Mr G had made clear to TSB from the outset that an increase which formed a not insignificant proportion of his salary, was temporary. It was dependent on the continuation of his secondment, which could not be guaranteed. I know our service doesn’t have a complete record of communications between Mr and Mrs G and TSB, but those communications do include Mr G telling TSB he was now on secondment, and telling it about a salary uplift. So if Mr G had explained in detail how his future salary would be determined, it is unfortunate that the communications I have seen do not appear to reflect this. TSB says Mr G had told it this secondment was likely to continue for many years into the future. But it has been clear that the documentation it received in November 2024 provided no reassurances that Mr G’s secondment would continue long enough to support this lending. I understand that G expected the project he was working on to run for much longer than this, and also that he expected to remain with that project. But his employer wouldn’t confirm that this secondment would extend beyond March 2026. I think that means it was reasonable for TSB to conclude it couldn’t rely on his existing salary level to continue past this date. TSB has also been clear that this was not the only reason this lending was declined. TSB has explained its concerns about Mrs G’s future income, and the further evidence Mr and Mrs G have now sent us, supports the conclusion that this was also a factor in TSB not feeling able to lend Mr and Mrs G as much as they wanted. TSB has also pointed out that Mrs G had been full time when it first considered lending to them, but had since reduced her working hours which also affected affordability. Mr and Mrs G say they are concerned that TSB had demonstrated gender bias, by not accepting Mrs G would be able to commute a long distance. But TSB hasn’t suggested this is why it rejected this application. It says Mrs G at first said she would work from home, then that she would commute, sometimes staying with friends, then said she would secure work closer to home. So it appears that on more than one occasion when TSB raised concerns about the sustainability of Mrs G’s future income based on the plans she had set out, Mrs G then offered a different future plan. I do think it was reasonable for TSB to have concerns about the stability of Mrs G’s future income in circumstances where Mr and Mrs G did not seem to have a settled plan over where, and how, she would work in future. I note Mr and Mrs G also thought I was setting the bar too high, in saying they could still have withdrawn from their purchase when they found TSB wasn’t prepared to lend what they wanted. My provisional decision made clear that this would only have been a concern, if I had thought it was most likely that TSB had misled them. I said then that I didn’t think that was what was most likely to have happened here. And, for the above reasons, I haven’t changed my mind. I know that Mr and Mrs G will be disappointed, but I don’t think TSB misled them about what it would consider when deciding how much to lend them, and I think TSB has demonstrated fair reasons why it wasn’t ultimately able to lend them as much as it had first thought. So I don’t think it would be fair and reasonable to uphold their complaint. I’ll now make the decision I originally proposed.

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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 G and Mr G to accept or reject my decision before 26 May 2026. Esther Absalom-Gough Ombudsman

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