The lender withdrew its product transfer service in early April and expected to start again at the end of May.
However, it has been hit by wider IT issues within the bank meaning existing customers have not been able to take up a new mortgage with the bank for more than three months.
Last month TSB apologised for the extended outage of the system and pledged that no customers would be left out of pocket as a result.
It has now gone further to include waiving ERCs for customers who wish to move to an alternative lender.
May not want to wait
A statement from the bank reiterated the apology and added: “No customer will be left out of pocket as a result of this, and we will work with any customers impacted on any individual basis.
“Where an existing customer wants to move to a new mortgage product with TSB but we cannot fulfil their product transfer needs at this point in time, we will fully refund the difference in interest charges between our standard variable rate or Homeowner Variable Rate (that they will move onto temporarily) and the fixed rate they could have otherwise secured until we can complete the product transfer.
“We also appreciate that some customers may not want to wait. Our advisers can talk them through alternative options available to help meet their borrowing needs (for example via a broker) and we will support customers if they want to move to another provider, for example, waiving applicable early repayment charges.
“We recommend that any customers who may be impacted by the temporary withdrawal of product transfers get in touch with us as soon as possible.”