TSB is stopping borrowers moving to cheaper mortgages – due to an IT problem.
Following its takeover by Spanish bank Sabadell, TSB is installing a new computer system which involves shifting 1.3 billion customer records.
Last week, TSB said it had to ‘turn a few things off temporarily’.
Glitch: Following its takeover by Spanish bank Sabadell, TSB is installing a new computer system
Borrowers are being told they cannot switch to a better home loan deal for the next few weeks.
The restriction began last week and the bank has not named an end date.
Ray Boulger, of brokers Charcol, said: ‘No timescales have been given for when applications for a product transfer can be accepted which puts borrowers nearing the end of a deal in the impossible position of not knowing whether to wait and hope for an early resolution – or to remortgage to avoid the risk of an indefinite period on the bank’s standard rate.’
He said the bank may have been breaking the rules of the City regulator by appearing to offer transfers on its website last week. Following the Mail on Sunday’s intervention the bank last week said it would make changes to the site
The bank says no customer will be left out of pocket. TSB charges 3.99 per cent for its Homeowner Variable Rate, which customers pay when their cheaper fixed-rate deals end.
A customer with a typical £150,000, 25-year loan would have to pay £790 a month on the bank’s variable rate, but just £602 a month on its cheapest fixed rate, a two-year deal at 1.54 per cent.
An estimated 750 customers are affected. TSB said: ‘We’re really sorry. Some customers may not want to wait. We recommend they get in touch with us.’
It is not TSB’s first problem with the new system. It had hoped to move many records over last year but the rise in interest rates caused it to delay the shift, costing the bank £70 million.