How do you use the home loan balance transfer calculator?
- Enter the loan outstanding, the years left, your current rate and the rate the new lender has offered you.
- Add the switching costs from the new lender’s offer, such as processing fee, legal and valuation charges, under “Add switching costs and a new tenure”. You can also try a different tenure there.
- Read the net saving, the EMI change and how many months it takes to recover the costs.
When is a home loan balance transfer worth it?
A balance transfer moves your outstanding loan to a new lender at a lower rate. It pays off when the interest you save over the remaining years is more than the cost of switching. The gap matters more when the balance is large and many years are left; near the end of a loan, even a good rate cut saves little.
Under the RBI’s directions, lenders cannot charge foreclosure fees when an individual closes a floating-rate loan taken for non-business purposes, including to move to another lender. The latest directions apply to loans sanctioned or renewed from 1 January 2026. Before switching, ask your current lender if it will match the new rate; a rate revision with your own lender can avoid the switching costs.
How the saving is worked out
EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1)EMI × months − outstandingInterest left now − interest left after switching − switching costsSwitching costs ÷ monthly EMI savingWorked example: ₹ 50 lakh, 20 years left, 8.5% to 7.75%
The EMI falls from ₹ 43,391 to ₹ 41,047. Over the remaining 20 years, interest drops from ₹ 54,13,879 to ₹ 48,51,383. After ₹ 15,000 of switching costs, the net saving is ₹ 5,47,496, and the costs are recovered in 7 months.
Worked example: when a switch is not worth it
With ₹ 15 lakh left over 5 years, a cut from 8.5% to 8.35% saves only ₹ 6,500 of interest. After ₹ 15,000 of costs, switching leaves you ₹ 8,500 worse off.
Net saving at different offered rates
| New rate | New EMI | Net saving |
|---|---|---|
| 8.25% | ₹ 42,603 | ₹ 1,74,091 |
| 8% | ₹ 41,822 | ₹ 3,61,598 |
| 7.75% | ₹ 41,047 | ₹ 5,47,496 |
| 7.5% | ₹ 40,280 | ₹ 7,31,760 |
What should you keep in mind?
- Compare the full offer: rate type, reset terms and all fees, not just the headline rate.
- A switch involves new paperwork and a fresh mortgage with the new lender; have a property lawyer check any new documents you sign.
- A longer tenure lowers the EMI but usually raises total interest. Try it under “Add switching costs and a new tenure”.
Frequently asked questions
Related answers and guides
- When Does a Home Loan Balance Transfer Make Sense?
- How Much Home Loan Can I Get on My Salary in Bengaluru?
- Repo Rate Hike EMI Impact: Home Loan Pass-Through Tracker
- Home Loan Affordability in Bengaluru: 2016–2026 Index
Sources
- Reserve Bank of India (Pre-payment Charges on Loans) Directions, 2025, RBI/2025-26/64 of 2 July 2025, effective for loans sanctioned or renewed on or after 1 January 2026.
- Standard reducing-balance EMI. Rates and costs are your inputs, not offers. Checked 19 Oct 2026.
Indicative only. Check the written offer with both lenders, and verify any tax effect with your Chartered Accountant before acting.
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