The Financial Ombudsman Service (FOS) ruled against the bank for age discrimination after it turned down the mortgage application as one of the couple would be over 65 at the end of the term.

A report in the Sunday Times said the couple were in their forties and had applied for a joint £250,000 interest-only mortgage and planned to repay over an 18-year term.

Following this decision the couple made an official complaint to FOS.

The ombudsman reprimanded the bank and described its decision process as “inadequate” and “flawed”.

“The bank relied on untested assumptions, stereotypes or generalisations in respect of age,” the ruling in favour of the couple stated.

HSBC has been told to pay compensation of £500 to the couple and must also reconsider the application.

This is the first time an age-related complaint has been upheld by the ombudsman.