The chancellor Alistair Darling has held talks with the Financial Services Authority to discuss what levels of fees are fair for lenders to charge.
Darling said: “I’m very concerned that people ought to be treated fairly, especially people coming off fixed rates and going on to different rates.”
He said he accepts that there are costs involved in changing mortgage deals but he does not want consumers to be taken advantage of.
The chancellor has said he is not looking to impose a cap on fees.
The CML has responded to the chancellor’s criticisms, saying it has not met with him to discuss this specific issue.
It believes that constraining the market to offer products priced in only one way would be detrimental to customer choice.
It says: “No-one has to pay an arrangement fee, as fee-free deals still exist.
“We have not discussed the level of arrangement fees with the chancellor, although we have discussed the position of people coming off short term deals onto higher payments.
“Unless these people wish to remortgage, they will not pay a fee, although they may face higher monthly payments as a result of prevailing higher interest rates.”
The CML insists that lenders are committed to fair treatment for people facing increases in their monthly payments and that the signs are encouraging that most people are maintaining payments successfully.
It adds that arrangement fees vary between different lenders and different mortgages. There is still a wide choice between mortgages with lower arrangement fees and a potentially higher interest rate, and those with higher fees that often have a lower interest rate.