A couple in their 40s became unusual victims of age discrimination after their bank rejected a £250,000 mortgage application because it deemed the husband to be too old . HSBC was ordered to pay them compensation after the banking industry watchdog found it ‘ relied on untested assumptions , stereotypes or generalisations in respect of age ’ in the case . The banking giant was criticised for refusing to grant the £250,000 loan because the husband would have been over 65 when the 18-year-deal finished , according to The Sunday Times . A couple in their 40s became unusual victims of age discrimination after HSBC rejected a £250,000 mortgage application because it deemed the husband to be too old . In the first case of its kind , the Financial Ombudsman Service found the lender guilty of being ‘ unfair ’ . HSBC was ordered to pay £500 to the couple for their ‘ distress and inconvenience ’ over the ‘ unfair application of its age policy ’ , and was told to reconsider their loan application . Bosses at the bank defended their decision and argued it was ‘ entitled to apply a maximum age policy ’ , according to ombudsman documents seen by the newspaper . But the ombudsman said : ‘ The bank relied on untested assumptions , stereotypes or generalisations in respect of age. ’ The couple , who do not wish to be named , applied for the joint interest-only mortgage over 18 years on their home , in which they held substantial equity . HSBC had issued a decision in principle , indicating that they would be prepared to lend the money , but it then refused to proceed due to the husband ’ s age . The husband , however , does not plan to retire at 65 and his final salary pension would be large enough to cover the monthly repayments . He also has pension pots and his wife would have been able to pay the loan from her income alone , if necessary . The couple complained and claimed they had been victims of discrimination . The complaint was upheld by the ombudsman - the first time it has done so specifically on the grounds of age for a mortgage . HSBC said its decision was based on its age restrictions for interest-only loans , a type of mortgage that allows borrowers to pay off the interest but none of the capital . HSBC was ordered to pay £500 to the couple for their ‘ distress and inconvenience ’ over the ‘ unfair application of its age policy ’ , and was told to reconsider their loan application . The bank – like many other lenders - has tightened its criteria , and does not offer interest-only loans with a term beyond a borrower ’ s 65th birthday . For repayment mortgages , the age ceiling is 75 . The bank told The Sunday Times : ‘ As a responsible lender , we need to ensure our customers ’ ability to repay their mortgage . ‘ With interest-only lending we also need to understand how a customer will repay the capital when the mortgage matures . ‘ Regulatory requirements to show responsible lending and the repayment vehicles associated with interest-only loans have become more stringent since this application was made . ‘ It ’ s important to stress that when we look at a mortgage application we take a number of different factors into account , which includes assessing each customer ’ s individual circumstances. ’ The ombudsman ’ s decision offers hope for borrowers who have struggled to get mortgages due to strict policies on age and income .
HSBC was ordered to pay £500 to couple for ‘ distress and inconvenience ’ The banking giant was criticised for refusing to grant the £250,000 loan . Bosses defended decision and argued it was ‘ entitled to apply maximum age policy ’