TSB customers who have a mortgage issued £30,000 warning

TSB customers who have a mortgage issued £30,000 warning
-Credit: (Image: Reach Publishing Services Limited)


Thousands of UK households have been issued a blow in a £30,000 mortgage compensation claim. A group of former Northern Rock 'mortgage prisoners' have lost an initial case against TSB in London’s High Court after the Judge ruled the bank had “not breached the express terms” of the contracts by charging different interest rates.

TSB did not breach the terms of its home loan deals, a judge decided on Wednesday in a preliminary ruling. Judge Nicholas Thompsell ruled that the Spanish-owned bank, whose Whistletree subsidiary bought the loans eight years after the UK government bailout of Northern Rock in 2008, had not violated the express terms of claimants' contracts with its interest rates.

"Although they (clients) are disappointed that the result of the preliminary issues trial is not to immediately determine the claims in their favour, they are looking forward to progressing their claims to the next stage and – ultimately – to a full trial," said Harcus Parker lawyer Matthew Patching.

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Almost 400 former Northern Rock claimants allege they became trapped into paying high variable mortgage rates, each facing around £30,000 in extra interest. Harcus Parker argues the test case could open up claims from around 2,000 other claimants in a lawsuit that has been valued at up to 75 million pounds.

TSB has dismissed the case as misconceived, arguing it is a common feature of the mortgage market to charge different rates to different customers with different risk profiles, which was neither surprising, unfair, nor a breach of any obligations.

High Court Judge Nicholas Thompsell found no breach of the loan terms. Thompsell said: “The defendant has not breached the express terms of the claimants’ mortgage contracts by charging the claimants interest rates based on the Whistletree SVR and not on the TSB SVR.”

“The Whistletree SVR should be regarded as the continuation of the original SVR originally operated by Northern Rock, and not as a new rate.”