The lender stopped accepting new mortgage applications from existing customers during its move to a new platform, but had expected to accept switching requests from the end of May.
However, the lender’s battle with wider IT issues has delayed the return of its direct product transfer service.
There is now no date for the return of the service.
Customers forced to stay on the lender’s Standard Variable Rate (SVR) will be refunded the difference in interest payments, TSB has pledged.
No-one out of pocket
The lender hopes to have the service back as soon as possible, and to also offer the service to brokers as quick as it can, a spokeswoman confirmed.
She said: “We would like to apologise for the delay in turning our mortgage product transfer capability back on.
“We know how frustrating this must be but we would like to reassure our customers we are working as hard as we can to reinstate this, and no customer will be left out of pocket as a result.
“We would encourage any customers who are looking to complete a product transfer with TSB to contact us to discuss their circumstances as soon as possible.
“They can do this by contacting either their local branch or calling us on 0800 056 1088.”
It comes on top of a torrid couple of months for TSB, with the lender suffering mortgage service issues related to the weather and high demand, alongside the systems meltdown that left millions of customers unable to access their current accounts.
The lender last week admitted more than 1,300 customers had money stolen as result of IT problems.