In a preliminary ruling, the High Court found that TSB had not breached the terms of its mortgage agreements with hundreds of “mortgage prisoners”.
Judge Nicholas Thompsell ruled that the interest rates TSB charged for its Whistletree subsidiary which bought £3.3 billion of mortgages from Northern Rock eight years ago after the bank's 2008 government bailout did not breach contracts with homeowners. 
Around 400 former Northern Rock claimants claim they were locked into paying the Whistletree standard floating rate, which was 2.29% higher than the equivalent TSB standard floating rate.
The class action lawsuit claims these homeowners have paid an average of £30,000 in extra interest payments and, if 2,000 other homeowners join the suit, led by law firm Harcus Parker, it will be a test case worth up to £75 million.
However, Judge Thompsell said TSB had not breached its contracts with those mortgage holders.
“Whistletree's standard floating rate should be seen as a continuation of the original standard floating rate that Northern Rock originally administered, rather than a new rate,” he said.
The UK Mortgage Prisoners Action Group, which supports the plaintiffs, said it was “disappointed” with the ruling but stressed that it was a preliminary ruling on various aspects of the case and “not a hearing on the class action against TSB/Whistletree”.
A TSB spokesman said: “We welcome today's court decision which recognises that TSB acted in accordance with the terms of its Whistletree mortgage agreement.”
The Mortgage Prisoners Action Group is due to meet with Treasury officials on October 1 to press for protections for consumers caught in this situation.
Rachel Neal, leader of the Mortgage Prisoners Action Group, said: “We will not rest until the government and regulators take action.”
“It is deeply disappointing that 16 years after the global financial crisis, our members continue to be disadvantaged because of a lack of adequate safeguards in place regarding the sale and transfer of mortgages.
“Mortgages should not be in the hands of profiteering debt collectors who don't offer mortgage products.”
