Home Loan Balance Transfer

If you took your home loan more than two or three years ago, there is a fair chance you are paying more than a new borrower would today. A balance transfer moves the outstanding to a lender charging less.

Why the saving can be large

On a long loan, a small rate cut compounds. Move ₹40 lakh with 18 years remaining from 9.5% to 8.6% and the interest saved runs into several lakh. The earlier in the loan you switch, the bigger the gain, because the early years are when you are paying mostly interest.

Do the honest arithmetic first

Switching is not free. Expect a processing fee of 0.25% to 0.5%, legal and valuation charges, and stamp duty on the fresh mortgage in some states. Add it all up and compare against the interest saved. Our balance transfer calculator does exactly this and shows the net saving and the break-even point in months.

As a rough rule, a transfer is worth it if the rate gap is at least 0.5% and you have more than five years remaining. Below that, the costs usually eat the benefit.

Ask your current lender first

This costs you nothing and often works. Banks would rather reduce your rate than lose the account, and many will match a competing offer for a small conversion fee, which is far cheaper and faster than a full transfer. Get the competing sanction in writing first, then ask.

Where we help

We run the numbers both ways, including what your existing lender is likely to offer if pushed. Sometimes our advice is to stay put and negotiate, and we will say so.