Loan victory: and they're not alone

A homeowner whose case was first highlighted in Jobs & Money has won a landmark case against Britain's biggest mortgage lender which could benefit hundreds of thousands of borrowers.

Chris Wright's ombudsman victory is likely to trigger a flood of compensation claims from other Halifax borrowers who have also been left out of pocket after being excluded from its much-trumpeted lower standard variable mortgage rate. We featured Mr Wright's original complaint last March.

Nationwide and Abbey National also lost near-identical cases this week, paving the way for payouts to their customers, too. HSBC had its appeal thrown out two months ago.

All told, the total number of borrowers affected could top half a million, a million or even more. You could be one of them. But don't expect the lenders to automatically compensate everyone who has lost out.

If you feel you've been treated unfairly, you are going to have to complain as it doesn't look like they are going to seek you out and put you right. They seem to be banking on borrower apathy.

You've got nothing to lose by firing off a letter of complaint. You may well be entitled to compensation plus the right to lower monthly mortgage payments, which could add up to a saving of thousands of pounds. It's quite possible they will cough up without forcing you to go to the ombudsman.

This week's Financial Ombudsman Service rulings relate to the decision by several lenders to bring in headline-grabbing new lower standard mortgage rates but to forbid some of their existing customers from taking advantage of these, insisting they stay tied to the more expensive "old" rate.

The ombudsman this week ruled that Halifax was wrong to leave Mr Wright and his wife Brooke marooned on its old standard rate. The couple, of Henley-on-Thames, Oxfordshire, have had a Halifax mortgage for many years. In 1998 they transferred to a capped rate deal where what they pay is capped at 7.25%.

When the Halifax unveiled its lower rate a year ago, they assumed their rate would fall. But Halifax told them customers with capped and discounted rate loans taken out before March 2001 remain linked to the old, higher rate.

Chief ombudsman Walter Merricks has ordered Halifax to put Mr Wright on to the lower rate (currently 5%), refund the money he has been overcharged, and pay him £150 for the inconvenience suffered. Mr Wright, 51, told Jobs & Money the ruling will save him about £750 a year.

So, what happens now? The Halifax has ditched its "new" standard variable rate but the 300,000 people who have moved onto it since March will stay on it. The bank says the ombudsman's decision is "specific" and relates only to the Wrights.

Several mortgage experts argue that apart from people on fixed-rate or base rate tracker deals, anyone with a mortgage linked to the old Halifax standard rate could be entitled to compensation.

The ombudsman's ruling seems to back that view. Halifax came a cropper because of three words in the Wrights' mortgage contract: "our base rate".

Halifax argued that "our base rate" was the higher one, but Mr Merricks said an ambiguous contractual term must be given the interpretation that is less favourable to the party who supplied the wording" - that is, Halifax. This suggests that if your documents state something like "the interest rate we will charge will be our base rate..." you have a strong case.

Nationwide: Up to 200,000 borrowers could be affected by this week's ruling against the society. The case is understood to involve a discounted rate mortgage-holder who felt the rate he pays should be linked to Nationwide's lower "base mortgage rate" rather than its old standard rate. Nationwide says there will be no immediate change for any existing borrowers. But, if you're a discounted rate borrower linked to the higher rate, you should consider complaining.

Abbey National: It lost the first round of its ombudsman fight this week. It could appeal but may now decide not to. Its case involved a cashback mortgage-holder angry at being linked to the old standard rate rather than one of the lower tracker rates.

Financial Ombudsman Service, tel: 020 7964 1000 www.financial-ombudsman.org.uk