Records showed bank acted correctly in lending dispute

Concerns about lending decisions,
Marisol was on a benefit and looking after her elderly mother. She owned three properties over which the bank held mortgages. One property was a rental, a second was a half-completed holiday home, and the third was the house in which she lived. Marisol sold the rental property because the bank wanted her to reduce the size of her lending. She then applied for top-ups totalling $100,000 to continue building the holiday home and deal with her mother’s estate.
October 2021

Marisol next got into arrears with rates on the holiday house. She asked the bank to release the mortgage over the holiday home. The bank said it would do so only once Marisol had cleared all the loans. Marisol maintained the bank had previously told her it would release the security without any change to her existing lending arrangements. She refinanced with a non-bank lender and then complained that the bank had:

  • refused to top up her home loan
  • refused to take her back as a customer and lend to her again after she refinanced with a non-bank lender
  • failed to tell her that selling the rental property, with the resulting loss of rental income, would affect how much she could borrow
  • failed to tell her she could change to interest-only lending
  • misled her about discharging a mortgage over the holiday home while building work was incomplete.

She said the bank’s actions led to her suffering financial loss, including the extra interest she was paying to the non-bank lender.

Our investigation

The bank’s decisions to refuse to lend her more, take her back as a customer and decline to release its security without any change to her lending arrangements were all outside our terms of reference. They are commercial decisions made by the bank, over which we do not have jurisdiction.

The bank’s records showed it told Marisol the loss of rental income would affect her ability to borrow more money, so the bank did not mislead her. The bank was also under no obligation to proactively offer her interest-only lending terms.


We did not uphold Marisol’s complaint.

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