Santander UK Plc · DRN-6159346

The complaint Mr S, Mrs S, Mr T and Mrs T are unhappy that Santander UK Plc turned down their mortgage application. What happened Mr and Mrs S held a mortgage with Santander that they’d taken out in 2022. Their 2022 mortgage offer showed they were borrowing £180,000, over 22 years on a repayment basis. It said the interest rate was fixed at 2.94% until 2 September 2027, and if the mortgage was repaid before that date an early repayment charge (“ERC”) would be incurred. In 2025 Mr and Mrs S decided to sell their property and buy a new one with some family members, Mr and Mrs T, and so they approached Santander to ask about porting their mortgage to a new property, increasing the borrowing amount and adding Mr and Mrs T onto the mortgage. They were told it was possible, but when checks were done Santander declined the application due to the amount of secured credit held by Mr and Mrs T which meant the application fell outside its risk appetite. Unhappy with that a complaint was raised, which Santander responded to in August 2025. It said the lending decision wouldn’t be changed, but it would request the credit checks be removed from the credit files of all four applicants. The complaint was referred to our service where it was looked at by one of our Investigators. He didn’t uphold the complaint saying that Santander is entitled to have its lending criteria, and having examined that, he wasn’t persuaded Santander had done anything wrong. Mr S, Mrs S, Mr T and Mrs T didn’t agree and so the case was passed to me to decide. 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 trust Mr S, Mrs S, Mr T and Mrs T won’t take it as a discourtesy that I’ve condensed their complaint in the way that I have. Although I’ve read and considered the whole file I’ll keep my comments to what I think is relevant. If I don’t comment on any specific point it’s not because I’ve not considered it but because I don’t think I need to comment on it in order to reach the right outcome. I’ve carefully considered all the information and evidence provided, and having done so I don’t uphold this complaint. I’ll explain why. I appreciate Mr S, Mrs S, Mr T and Mrs T feel Santander treated them unfairly. But it’s not my role to tell lenders how much money – if any - to lend to particular consumers. Lenders are able to use their commercial judgement to decide how much, if anything, to lend to consumers. My role is to ensure such judgement is applied fairly; it isn’t to substitute my

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judgement for the bank’s. In this case, Santander applied its lending criteria to Mr S, Mrs S, Mr T and Mrs T’s application and, having done so, it wasn’t willing to lend. The 2022 mortgage offer says “You have the right to transfer this loan to another property. You must meet conditions set out in the mortgage conditions under 'Transferring your loan to a new mortgage'. You must also meet our lending criteria and pass our affordability assessment at the time.” Mr S, Mrs S, Mr T and Mrs T’s application didn’t meet Santander’s lending criteria and so it was unwilling to lend. That lending criteria is commercially sensitive, and so it would be inappropriate for me to pass that information to Mr S, Mrs S, Mr T and Mrs T. But I’ve reviewed the information and I’m satisfied that Santander fairly considered the application in line with its underwriting policy and risk appetite. Our right to take into account information received in confidence is set out in our rules at DISP 3.5.9R(2)1. Mr S, Mrs S, Mr T and Mrs T have said their complaint centres on the disproportionate credit-risk and underwriting assessment applied to their application, and that they were held to a higher standard than other applicants. It isn’t clear why Mr S, Mrs S, Mr T and Mrs T feel that way as Santander would have applied the same criteria to any other applicants that made a similar application. Mr S, Mrs S, Mr T and Mrs T were asking Santander to substantially increase the mortgage debt, as well as adding new people (Mr and Mrs T) onto the mortgage. I don’t agree the credit risk and underwriting assessment for that was disproportionate. They’ve also said it appears to have been a blanket rule rather than an individual assessment, but that is allowed. I acknowledge Mr S, Mrs S, Mr T and Mrs T feel that meant they were treated more harshly due to there being four of them than they would have been had there just been two applicants, but I don’t agree. Had the two applicants just been Mr and Mrs T they would have been treated the same way, with the application being declined. The issue was the amount of secured credit held by Mr and Mrs T, not the fact there was four applicants. Santander looked at the circumstances of the four applicants, compared that to its lending criteria, and wasn’t willing to lend as the proposition was outside its appetite for risk. It also wasn’t willing to lend in just Mr and Mrs S’ names if all four parties were going to be living in the property and Mr and Mrs T were contributing to the deposit for it. Nothing Santander did here was wrong, or unusual in the mortgage industry. A lender is entitled to decide its own lending criteria and then review applications against that. Mr S and Mrs S have said that under section 19.3a of their mortgage terms and conditions, Santander should accept a transfer unless it reasonably believes the risk of non-repayment is significantly greater, they could not afford the balance and interest, or the risk of loss to its security is significantly greater. But whilst they’re partially right, what they missed is that term is only applicable to the “transfer balance”; “We will accept your application for the transfer balance to be transferred to the new mortgage unless we reasonably think that…” [my emphasis]. And it defines “transfer balance” as “any part of the money you owe us (not exceeding the total amount we have lent you under this mortgage”. So, all that term says is that Santander (subject to the conditions being met) would transfer over the existing balance (which I understand was around £160,000) to a mortgage held against a new property. But that isn’t what Mr S, Mrs S, Mr T and Mrs T had applied for, they also wanted to increase the mortgage balance as part of the process (with the extra being referred to in the mortgage terms and conditions as the “top up balance”) so that term isn’t applicable to their situation. 1 https://handbook.fca.org.uk/handbook/disp3

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Whilst Mr S, Mrs S, Mr T and Mrs T may feel there was stronger affordability with four applicants, due to the additional income, that isn’t the only consideration in a lending decision. Nor is the fact Mr and Mrs S would have repaid some credit commitments, and that Mr and Mrs T’s buy-to-let portfolio was generating an income. It seems Mr S, Mrs S, Mr T and Mrs T are conflating an affordability calculation (that is, whether they can “afford” the mortgage based on their income and expenditure) with Santander’s lending policy. There are many other things a lender looks at other than the straight question “Can the consumers afford this mortgage?” Whether or not Mr S, Mrs S, Mr T and Mrs T passed an affordability check isn’t the issue here. As I said, Santander’s lending criteria is commercially sensitive, but I have reviewed it carefully and having done so I’m satisfied Santander fairly declined this application as it didn’t meet Santander’s lending criteria. It follows that I don’t uphold this complaint. My final decision I don’t uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr S, Mrs S, Mr T and Mrs T to accept or reject my decision before 24 April 2026. Julia Meadows Ombudsman

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