What charges apply on a home loan balance transfer?

Expect a processing fee (often 0.25%-0.5% of the loan), plus legal, technical valuation and stamp or MOD charges. Under floating-rate home loans, the RBI does not permit foreclosure penalties, which helps.

How much rate difference makes a transfer worthwhile?

On a large, long home loan even 0.5% can save lakhs. As a rule of thumb, a difference of 0.5 percentage points or more, early in the tenure, is usually worth exploring.

Does the new lender fund the entire outstanding?

Yes. The new lender directly pays off your old loan against the property, and the mortgage is transferred to them. You then service EMIs to the new lender.

Should I transfer if only a few years are left?

Late in the tenure most of your EMI is principal, so there is little interest left to save. A transfer then rarely justifies the fees and paperwork.

Balance Transfer & Top-Up

Home Loan Balance Transfer

Refinance your home loan and save lakhs over the long run

Calculate savings

Free for borrowers 30+ lenders compared

A home loan balance transfer lets you shift your outstanding housing loan to a new lender offering a lower interest rate. Because home loans run for 15 to 30 years and involve large amounts, even a small rate reduction can translate into lakhs of rupees saved over the full tenure.

Home loan rates in India are usually linked to an external benchmark such as the RBI repo rate. Over time, spreads offered to new borrowers may fall below what you are paying, especially if your income or credit profile has strengthened since you took the loan.

Since balance transfers are most powerful early in the loan, when the interest portion of each EMI is highest, timing matters. Weigh the processing fee, legal and valuation charges of the new lender against the interest you will save across the remaining years.

When it saves you money

You are in the first half of the loan tenure, when most of each EMI is still interest.
The new rate is at least 0.5-1 percentage point lower, which on a large balance is significant.
The processing, legal and valuation fees are low or waived under a festive or transfer offer.
Your outstanding balance is large enough that the rupee interest saved dwarfs the switching cost.
You plan to keep the loan for several more years rather than foreclosing soon.

Worked example

A quick savings illustration

Outstanding balance: ₹40,00,000
Remaining tenure: 180 months
Old rate: 9.5% p.a.
New rate: 8.5% p.a.
Transfer + processing cost (~0.5%): ₹20,000
Approx. net interest saved: ~₹3,80,000 over the tenure

Illustrative only. Actual savings depend on your outstanding balance, remaining tenure, the new rate and any processing fee.

Calculate your savings

Balance transfer savings calculator

Outstanding balance (₹)

₹50K₹1Cr

Current interest rate (% p.a.)

726

New interest rate (% p.a.)

726

Remaining tenure (months)

6300

Processing fee on transfer (%)

You could save (net)

₹58,167

New EMI: ₹20,483
Monthly saving: ₹1,378
Gross interest saved: ₹66,167
Less processing fee: ₹8,000
Net saving: ₹58,167

FAQ

Home Loan Balance Transfer — FAQs

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Stop overpaying on your existing loan

We compare transfer offers across lenders and show you the honest, net saving — including fees.

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