The lender will temporarily remove its ceiling, which meant that customers would never pay more than 3 per cent over the base rate.
It is understood the lender is blaming unprecedented market conditions for the move and that it plans to reintroduce the ceiling rate once market conditions improve.
Skipton has also made amendments to their arrears payment charges. Previously, the lender charged a monthly fee of two per cent of the arrears balance, up to a maximum charge of £100.
Under its new arrears charging policy, customers will pay a flat fee of £40 per month, from the first month they go into arrears, rather than from the second month in arrears as they did previously.
Skipton Building Society head of credit management Carole Cox says customers have been written to, explaining the changes and that the change to arrears charges means that many borrowers will pay less.
She says: “We continually review our arrears management processes to ensure they reflect current best practice and remain appropriate to the needs of our borrowers and our business.
“Whilst it is true that following our most recent review the new flat fee of £40 is being charged at month one rather than in month two as it was previously, it does not rise in line with any further increase in arrears as the old percentage fee used to and reflects the work which is undertaken at the very early stage of arrears where a proactive approach is taken by the society to ensure our borrowers are helped back on track as soon as possible.
“This means that many of our borrowers will be charged less, not more.”