Mortgage legislation outlined in the Treasury's consultation document could restrict choice and flexibility in the mortgage market according to Cheltenham & Gloucester.
The lender claims the fact interest rates do not always mirror the Bank of England base rate is not the real issue.
The issue is that all mortgage terms and conditions are explained clearly and fully to the customer.
C&G says legislation is inevitable but should build upon the framework instigated under current voluntary mortgage code. But it should not infringe upon customer choice.
It believes transparency, clarity and choice should be at the foundation of change and charges should be explained upfront.
C&G also claim that the current focus on mortgages is overshadowing borrowers responsibility to their savers. It says a balanced approach is needed to protect both borrowers and savers.