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 The Council of Mortgage Lenders (CML) has today (June 26th) claimed that the government's suggestion of capping fees would plunge the market into further peril.
The chancellor expressed his concerns yesterday at the "rip-off" charges being placed on customers, which have seen rises of up to 600 per cent over the past two years.
He also claimed to have spoken to the CML about the situation, but the body has responded by stating that it has not engaged in any discussions about arrangement fees.
A CML statement read: "No-one has to pay an arrangement fee, as fee-free deals still exist. 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.
"Lenders have committed to ensuring that borrowers get adequate notice of their new payments to help them plan ahead for rising costs, and to encourage them to contact their lender if they are worried they will not be able to meet their new level of payments."
Despite the objections, the facts say that a typical arrangement fee for a two-year fixed-rate deal in 2006 was £400, but now the figure is nearer £1,000 - with fees of up to £2,500 being charged for borrowers who are considered more risky.
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