How to use this calculator
- Outstanding principal and remaining tenure: from your latest loan statement or the provisional interest certificate. Use the principal still owed and the EMIs left, not the original loan.
- Current rate: the rate on your latest statement. On an older loan it may be well above what your bank now offers new customers.
- New rate: from the new lender's sanction letter or offer, not an advertisement. Ask if the rate is linked to the repo rate and what the spread is.
- Processing fee: the new lender's fee as a percentage of the loan. GST at 18% is added on top.
- Other charges: legal and valuation fees, stamp duty and registration for the new mortgage, and any document charges. Ask the new lender for a written list.
- Foreclosure charge: 0 for a floating-rate home loan to an individual. For a fixed-rate loan, take it from your KFS.
How we calculate net savings
We compare two schedules for your outstanding balance over the same remaining tenure:
- Staying with your current lender at your current rate.
- Moving to the new lender at the new rate.
The difference in total interest is your gross saving. From that we subtract switching costs: the processing fee, 18% GST on fees, legal/valuation/stamp duty charges, and any foreclosure charge.
The break-even month is when the interest you have saved so far first exceeds the costs you paid upfront. If you plan to prepay heavily or sell the property before then, the transfer will not pay off.
Worked example
₹40 lakh outstanding, 15 years left, moving from 9.5% to 8.5% with a 0.5% fee and ₹10,000 other charges:
| Current EMI | ₹41,769 |
| New EMI | ₹39,390 |
| Interest saved | ₹4,28,366 |
| Switching costs (incl. GST) | ₹33,600 |
| Net savings | ₹3,94,766 |
| Break-even | 11 mos |
The EMI falls by ₹2,379 a month, and the costs are recovered in 11 mos. After that, every month is pure saving.
Why the years left matter more than the rate gap
The same ₹40 lakh and the same 1% cut, with different amounts of time left on the loan:
| Years left | Interest saved | Net saving |
|---|---|---|
| 15 years | ₹4,28,366 | ₹3,94,766 |
| 10 years | ₹2,59,753 | ₹2,26,153 |
| 5 years | ₹1,16,485 | ₹82,885 |
And the same 15 years left, with smaller cuts:
| New rate | Net saving | Break-even |
|---|---|---|
| 9.25% | ₹74,694 | 3 yrs 5 mos |
| 9% | ₹1,82,162 | 1 yr 9 mos |
| 8.5% | ₹3,94,766 | 11 mos |
A small cut can still be worth it on a large loan with many years left, but it takes longer to recover the costs. If you might sell the house or close the loan within that period, the move may not pay.
Fixed-rate loans: when the foreclosure charge decides it
A ₹4 lakh personal loan at 16% with 3 years left, moving to 12.5% with a 2% processing fee. The old lender charges 4% to foreclose:
| Interest saved | ₹24,524 |
| Processing fee + foreclosure charge + GST | ₹28,320 |
| Net saving with a 4% foreclosure charge | -₹3,796 |
| Net saving if there were no foreclosure charge | ₹15,084 |
A rate cut of 3.5% still loses money here, because the two charges with GST are larger than the interest saved over 3 years. Without the foreclosure charge, the same move would pay for itself in 9 mos. Before transferring a fixed-rate loan, ask the old lender whether the charge falls after a certain number of EMIs.
Before you apply
- Ask your bank first. Banks often reprice existing floating-rate loans for a one-time fee. Use the new offer as your bargaining point.
- Check the spread. Most new floating-rate home loans are linked to the repo rate. The spread above repo usually stays the same for the life of the loan, so a lower spread is what you are really buying.
- Keep the EMI, cut the tenure. If you keep paying your old EMI at the new rate, the loan closes years earlier and the saving is larger than shown here.
- Collect the papers. Get a foreclosure letter and the list of property documents held by your old lender, and later a closure letter and the documents themselves.
Assumptions
- Both rates stay the same for the remaining tenure. In reality, floating rates move with the benchmark.
- The new loan has the same amount and tenure as your remaining loan; no top-up.
- Switching costs are paid upfront, not added to the loan.
- We do not discount future savings for inflation or time value of money.
- For the full decision, including what to check in the new lender's terms, read is a home loan balance transfer worth it? To see what keeping your old EMI would save, try the EMI vs tenure calculator.
Frequently asked questions
What is the minimum rate gap for a home loan transfer?
There is no fixed rule. The same cut saves very different amounts depending on the outstanding balance and the years left. A 0.25% cut on a large loan with 15 years to go can beat a 1% cut on a small loan with 4 years left. Enter your own figures and look at the net saving and the break-even month, not the rate gap alone.
What costs are involved in a home loan balance transfer?
Typically the new lender's processing fee (often 0.25% to 1% of the loan, plus 18% GST), legal and technical valuation fees, and stamp duty or registration charges for the new mortgage, which vary by state. A floating-rate home loan to an individual carries no foreclosure charge from the old lender. A fixed-rate loan may, so check your KFS.
Should I ask my current bank to lower my rate first?
Yes. Many banks let existing borrowers move to their current lower rate for a one-time conversion or switch fee, without the paperwork of a new loan. If the fee is lower than the transfer costs, staying is cheaper. Put the conversion fee into the calculator as other charges, with no processing fee, to compare the two routes.
How long does a home loan balance transfer take?
Often two to four weeks, sometimes longer. The new lender checks your income, credit and the property's papers, then pays your old lender directly. The old lender then releases the original property documents to the new lender. Keep paying your EMIs to the old lender until it confirms the loan is closed.
Can I transfer a personal loan or car loan too?
Yes, many banks and NBFCs take over personal and car loans. These are usually fixed-rate, so your current lender may charge a foreclosure fee, and the new lender charges a processing fee. On a short loan those two charges can cancel out a big rate cut. Enter both charges here before you apply.
Should I take a top-up along with the transfer?
Treat it as a separate loan. A top-up raises your total debt, may carry a higher rate than the home loan, and makes the transfer look better than it is if you only compare EMIs. Run the transfer on the existing balance only, then decide on the top-up on its own merits.