Lloyds Bank PLC · DRN-6149424

The complaint Mr P complains that Lloyds Bank PLC irresponsibly lent him a mortgage. What happened Mr P took out a mortgage with Lloyds in 2003. He borrowed around £450,000 on interest only terms over 20 years. The term of the mortgage ended in 2023. Mr P asked Lloyds to extend the term by five years, at the end of which he would sell the property to repay. Lloyds refused his request. Mr P complained. He said that when lending Lloyds had failed to assess whether he had an appropriate repayment strategy in place and had not discussed with him how he would repay at the end of the term. He said Lloyds failed to carry out appropriate checks and should not have lent. It should have checked that the broker who sold it was competent and had given proper advice, and that Mr P understood what he was agreeing to. It did not check that he had a repayment strategy in place. Lloyds said the mortgage was sold by a broker, so it wasn’t responsible for any advice Mr P was given. It said the application was made on the basis that Mr P would use investments to repay the mortgage, and it had no reason to doubt what it was told. Since the loan was taken out, it has made clear to Mr P many times that this is an interest only mortgage and that he would need to have a way of repaying the capital at the end of the term. Our investigator didn’t think the complaint should be upheld, so Mr P asked for it to be reviewed by an ombudsman. 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. I’m sorry to hear about Mr P’s current circumstances and health concerns. Mr P has previously complained about Lloyds’ decision to refuse a term extension and to threaten legal action to repossess the property. That complaint was considered by another ombudsman in 2025. The ombudsman did not uphold the complaint. I’m not going to revisit that in this decision – I’ll focus solely on the complaint about the lending decision. At the time the mortgage was taken out, mortgage lending wasn’t regulated. So the rules of mortgage regulation – known as MCOB – that Mr P has referred to don’t apply. However, Lloyds was required to give Mr P a description of how interest only mortgages worked, of the effect of not having a repayment strategy in place, and regular reminders that he needed to have a strategy for repaying the mortgage in place. It also needed to check that he had a plausible means of repaying – but it was entitled to rely on what it was told, and it didn’t need to carry out detailed checks of the repayment strategy. Lloyds was the lender, and it had to do the above as part of deciding whether it could

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responsibly lend. But Lloyds didn’t sell the mortgage. It was sold by a broker, and the broker was acting on behalf of Mr P not on behalf of Lloyds. It was up to the broker to make sure that the mortgage was suitable for Mr P’s needs and that he understood what he was agreeing to. I wouldn’t expect Lloyds to have checked the advice or checked whether the mortgage was suitable for Mr P. Lloyds’ job was to consider the application it received and decide whether it was responsible to lend. The application form for the mortgage was submitted by the broker. I don’t know if it was completed by Mr P or by the broker, but at any rate it was signed by Mr P to confirm the contents were correct. The application form said that Mr P intended to use investments to repay the mortgage. At the time, that wasn’t an implausible repayment strategy. I’m satisfied that Mr P would have been aware he was taking an interest only mortgage at the time. Whether that was right for his circumstances or not was a matter for the broker, not for Lloyds. Lloyds has also reminded Mr P of his responsibility to have a way of repaying the capital at the end of the term several times throughout the mortgage. Overall, having considered everything, I’m not persuaded that Lloyds’ decision to lend to Mr P on an interest only basis caused an unfair relationship to arise between him and Lloyds. I appreciate Mr P is in a difficult situation now that the term has ended and he’s not able to repay. But I’m not persuaded that’s because of anything Lloyds did wrong in lending to him in the first place. And as I’ve explained, I can’t consider the recent refusal of a term extension because that was dealt with by the other ombudsman. For those reasons, I don’t uphold this complaint. 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 Mr P to accept or reject my decision before 28 April 2026. Simon Pugh Ombudsman

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