Refused transfer of an existing fixed-rate mortgage to the buyers of the property

The clients had acquired a property as part of an inheritance division, which had been financed by the same bank for years. Subsequently, they concluded several long-term fixed-rate mortgages. According to the clients, the bank had assured them that these mortgages could be taken over by a buyer with sufficient creditworthiness in the event of a later sale. When the property was to be sold, the intended take over by the buyer did not take place due – from the client’s perspective – to the bank’s conduct. The bank then demanded an early repayment penalty. The clients considered this claim to be unfounded and intervened at the bank without success. The Ombudsman took up the matter and initiated mediation proceedings. As a result, discussions took place between the bank and the clients, which led to an amicable solution. The bank reduced the early termination penalty by half. The clients stated that they were satisfied with this outcome and felt that their interests had been adequately taken into account.

The clients had acquired a property as part of an inheritance division, which had already been financed for many years by fixed-rate mortgages with the same bank. After taking over, they continued the financing and, over time, entered into several long-term fixed mortgages themselves. According to their account, the bank had always assured them that these mortgages could be taken over by a buyer with sufficient creditworthiness in the event of a later sale of the property.

When the opportunity arose sometime later to sell the property, the clients looked for a buyer who would have been willing and financially able to take over the existing mortgages. From the clients’ perspective, however, this project did not fail due to the buyer’s creditworthiness, but rather because of the bank’s conduct. This had in fact rendered the assumption impossible. The bank did not process the buyers’ loan application in a supportive manner and made it clear to them that only if the application was assessed positively, The bank would grant them a new mortgage. If taking over the seller’s fixed-rate mortgage would be impossible. The sellers would have to pay an early repayment penalty in any case.

Subsequently, the purchasers were no longer willing to continue the financing with the seller’s bank and turned to another bank, which granted them the desired mortgage without any difficulty. The sellers’ bank demanded a substantial early repayment penalty from the clients upon termination of the fixed-rate mortgages. The clients took the position that such compensation was not owed, as the bank had previously held out the prospect that a buyer could take over the fixed-rate mortgages.

The clients then submitted a complaint to the bank. As, according to their account, they did not receive a substantive response to their arguments for an extended period, they turned to the Banking Ombudsman and requested assistance. The Ombudsman examined the facts based on the submitted documents and contacted the bank. He reminded the bank of its duty to address client complaints and suggested a direct clarification with the clients.

In his assessment, based on the documents submitted to him by the clients, the Ombudsman stated that he could not make a binding decision. However, he pointed out that the differing expectations of the parties and the unclear agreements regarding the possibility of the fixed-rate mortgages being taken over by a buyer would have created considerable potential for conflict. Against this background, an amicable solution seemed appropriate to him, which took account of the special circumstances and required concessions from both sides.

Subsequently, the bank held a meeting with the clients. The parties agreed to reduce the originally calculated early repayment fee of around CHF 26,000 by 50 percent. The clients agreed to this solution. They considered the conflict resolved and thanked the Ombudsman for his mediating support.