The trade body is attempting to move the debate away from passing on the latest 1% rate cut in full to clients as lenders grapple with competing demands.
These include the need to re-capitalise, offer help to struggling borrowers and balance the impact of the cut between home owners and savers.
Michael Coogan, director-general of the CML, says: “Current policy objectives are conflicting and incoherent. The government needs to decide on its key priority. The tug of war with lenders must end.
“We believe the government should urgently review the cumulative effect of the approach it has taken with the recapitalisation process on large lenders’ willingness and capacity to lend.”
Of the lenders that have changed their SVRs since the latest base rate decision, few have passed on the 1% cut in full.
In terms of SVRs, the Royal Bank of Scotland has cut its rate by 0.75% to 4.44%, Nationwide by 0.69% to 4% and Northern Rock by 0.5% to 5.34%.
Lloyds TSB and HSBC are the only high-profile lenders that have app-lied the reduction to their SVRs in full.
Halifax has staunchly defended its decision to cut its SVR by just 0.25% to 4.75%.
The lender argues that it has passed on all other recent base rate reductions but adds that given the prevailing low interest rate environment in the UK, the margin between mortgages and savings rates has narrowed.
A statement from the lender says: “We believe the action we are taking is right and strikes the appropriate balance at a time when interest rates are low and the economic outlook is difficult.”