Home Loan Balance Transfer Calculator
Check EMI drop, net saving after charges and break-even for a home loan transfer
| Item | Current lender | New lender |
|---|---|---|
| Monthly EMI | ā¹41,769 | ā¹39,390 |
| Total interest | ā¹35,18,418 | ā¹30,90,124 |
| Switching costs | ā¹0 | ā¹25,000 |
| Total cost (interest + charges) | ā¹35,18,418 | ā¹31,15,124 |
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Results are estimates, not financial advice. Rates, charges and rules change, so confirm with your bank, post office or a financial adviser before you decide. Terms of use
How to Use
- Enter your Outstanding loan and your Current interest rate.
- Enter the New lender's interest rate and the Remaining tenure in years or months.
- Add the processing fee (with GST) and other charges. Other charges means legal and valuation fees, stamp duty on the new mortgage and anything your current lender charges.
- The results update as you type: EMI now and after, interest saved, net saving after charges and the break-even time.
- If the switch isn't worth it, a note tells you why. The chart shows when the saving turns positive.
What is a home loan balance transfer?
In a home loan balance transfer, a new bank or housing finance company pays off your existing loan and you repay the new lender instead, usually at a lower interest rate. Your remaining principal and tenure stay the same, so a lower rate means a lower EMI and less total interest. Lenders often offer a top-up loan at the same time, but this balance transfer calculator looks only at the existing balance.
Switching isn't free. The new lender charges a processing fee. There are legal and valuation fees, stamp duty or registration charges on the new mortgage (these vary by state), and sometimes a charge from the old lender. So the real question is this: does the interest you save beat these one-time costs, and how soon?
How it's calculated
Interest saved = (EMI now ā EMI after) Ć months left
Net saving = interest saved ā (processing fee + other charges)
Break-even (months) = charges Ć· monthly EMI saving
Both EMIs use the same outstanding amount and remaining months. The break-even ignores the time value of money to keep it easy to follow. When the break-even period is short, the difference is small.
Worked example
You owe ā¹40,00,000 at 9.5% with 15 years left. Another lender offers 8.5%. The processing fee is ā¹10,000 and other charges come to ā¹15,000.
| Current lender (9.5%) | New lender (8.5%) | |
|---|---|---|
| Monthly EMI | ā¹41,769 | ā¹39,390 |
| Total interest over 15 years | ā¹35,18,418 | ā¹30,90,124 |
| One-time switching costs | Nil | ā¹25,000 |
The EMI falls by ā¹2,379 a month, so total interest drops by about ā¹4,28,294. Take off the ā¹25,000 of costs and the net saving is about ā¹4,03,294. You get the costs back in 11 months. That's a clear case for switching.
Now take a ā¹5,00,000 loan with 3 years left, moving from 9% to 8.9% with ā¹30,000 of costs. The EMI drops by only about ā¹23 a month, roughly ā¹840 over three years. You'd never recover the charges, and the calculator flags it as not worth it.
When does a transfer make sense?
- A real rate gap. The bigger the difference, the faster you break even. Small gaps rarely cover the costs unless the balance is large.
- Many years left. Interest is front-loaded, so switching early in the loan saves far more than switching near the end.
- A large balance. The same rate cut saves more rupees on ā¹50 lakh than on ā¹5 lakh.
- Ask your current lender first. Many banks will lower your rate (a "conversion" or reset) for a small fee if you ask, especially if you've repaid on time and have a good credit score. You skip the fresh paperwork and stamp duty.
- Compare the full offer. Check the rate's benchmark (most floating home loans are linked to an external benchmark such as the RBI repo rate), the spread, any teaser period and every fee in the Key Facts Statement.
Foreclosure charges
Under RBI rules, lenders can't levy foreclosure or prepayment charges on floating-rate loans to individuals for non-business purposes. So most home loan transfers carry no charge from the old lender. If your loan is on a fixed rate, a foreclosure charge may apply. Check your loan agreement and include it under "Other charges".