Money Marketing first revealed that Skipton was to temporarily remove its ceiling, which meant that customers would never pay more than 3 per cent over the base rate.
The lender blamed “exceptional circumstances” for the move and said it plans to reintroduce the ceiling rate once market conditions improve.
Burwood Financial Consultants managing director Peter Suttill says: “I think it sends out a worrying sign to the market. Lenders reneging on deals is a worrying trend.
“It is a matter of confidence. We are trying to restore confidence in the market, and if lenders start doing these sorts of things it inhibits that rebuilding of confidence.”
London & Country technical manager Richard Morea says: “The 1.45 per cent rise is a massive blow to Skipton borrowers linked to SVR, and the timing couldn’t be worse as the latest figures show a larger than expected rise in inflation, stretching finances even further.”
Skipton group chief executive David Cutter says: “While we understand this change will be unwelcome for those borrowers who will end up paying more as a result, we hope that they will understand it is a necessary step that is in the best interests of our membership as a whole, and indeed the society itself, in the long run.”