I am eight months pregnant and have had a joint mortgage application rejected after being asked by a Santander customer services agent if I was expecting a child. We currently have a mortgage with Santander and were hoping to port it to our new house. Initially, my husband and I had been told we could borrow £170,000 on the basis of my income. My husband is self-employed and will be the full-time carer for our child once my maternity leave ends. I’ve now been told that, because I will have an extra dependent, we can only borrow £140,000. Santander’s terms and conditions state that they do not discriminate against pregnant women. I have complained, but am told it will take up to eight weeks to resolve.
BD, Newcastle
It is illegal for lenders to ask customers if they are pregnant, vital though the answer may be. Banks have to tread a tricky path between the mortgage market review of 2014 and the Equality Act 2010 when deciding whether to lend. The 2014 review followed the financial crash and requires lenders to question applicants about their circumstances in more detail than previously, to ensure they can afford the repayments. The Equality Act forbids discrimination on grounds of pregnancy. The agent could, therefore, ask if you expect your circumstances to change, but most definitely could not ask if you were pregnant.
Santander confirmed that mortgage offers were reduced if it discovered an applicant was expecting a child, but admitted that its agent had no right to ask the question.
It contacted you the day after I got in touch and raised its offer to £153,000. The shortfall, it explained, was due to your student loan of which, it said, it was initially unaware. This was not enough to buy the house you hoped for and, during the hiatus, you lost your buyer. Santander, to make amends, has now paid you £2,085 in goodwill, which which covers the costs you incurred, including solicitors’ fees.
When your current mortgage renews in January, it has agreed to backdate the interest rate to the 3.5% available when you applied for the new loan, so that you’re not out of pocket. It says: “As a responsible lender, and part of our regulatory requirements, during the mortgage application process we need to understand if a borrower is aware of any future changes to their income, or costs, so we can ensure they are able to afford the repayments.
“In this case, the process was not undertaken in accordance with our guidance, and we would like to take the opportunity to apologise for the customer service received. We are also reminding colleagues about the importance of following processes and procedures.”
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