HSBC, the bank that launched a "rescue" mortgage for homeowners, is now forcing the same borrowers to pay arrangement fees of up to nearly £10,000 for a loan, according to Times Online.

It has emerged that borrowers applying for a 4.79% rate on a £250,000 mortgage now have to pay an arrangement fee 35% higher than before, up from £5,000 to £7,699. For existing HSBC customers who can take out larger loans of up to £500,000, the maximum fee rises to an astonishing £9,999. The bank unveiled its "rate-matcher" deal in February, offering borrowers who are remortgaging a home loan at the same rate they were paying previously.

 Reports suggest that the offer was marketed as a way of helping homeowners who faced a higher rate when remortgaging after a large number of banks increased the cost of their home loans to protect their businesses against the credit crunch. The increase makes HSBC's fee the highest on the market for a £500,000 loan, according to Moneyfacts.co.uk, the price comparison service. At the same time, borrowers with smaller loans who take out a rate-matcher deal, face paying larger arrangement fees with HSBC.

According to Times Online, for borrowers on a £120,000 two-year fixed-rate deal at 4.94%, the fee has more than tripled from £999 to £3,299. Additionally, those seeking a £190,000 two-year fixed-rate mortgage at 5.19% have seen arrangement fees rise by seven times, from £599 to £4,299. HSBC blamed the increasing cost of mortgage funding, for its decision to raise fees on the deal after extending the offer for a further six weeks.

A spokesman at HSBC, said: "We had to choose between pulling the deal, increasing fees or making a loss. We believe we made the right decision." But the rate-matcher offer ends for borrowers with existing mortgages with other lenders on Sunday and for HSBC customers, it ends on August 31. Chancellor Alistair Darling recently condemned mortgage lenders who charge high fees for treating borrowers unfairly.

Mr Darling told the Council of Mortgage Lenders that if fees were unfair, he would refer lenders to the Financial Services Authority, the City watchdog. Other statistics show that all lenders have opted to raise fees as well as mortgage rates since the credit crunch in response to the squeeze on mortgage funding. Halifax increased the fee on its two-year fixed-rate from £499 at the beginning of the year to £1,499.

HBOS yesterday introduced a new £295 "mortgage account fee", that is payable when the borrower switches to another lender or repays the loan. However, HBOS, which owns Halifax and Bank of Scotland, said the fee is designed to cover the administrative costs associated with a mortgage.

HSBC said today that its rate-matcher deal is "still the most competitive two-year fixed-rate provider in the market." A spokesman said: "This fee is based on a worst-case scenario and doesn't bear any resemblance to what the majority of customers would pay. The rate-matcher is not right for everybody."

Recently, the British Bankers Association revealed that mortgage approvals had fallen 20% from 34,752 in April to 27,986 in May, below a six-month average of 40,570.