Calculator
Balance transfer calculator
A lower rate is only half the story. This works out what you save after the cost of switching — and how many months it takes to get that cost back.
Processing fee, legal and valuation charges, stamp duty on the new mortgage.
- EMI now
- ₹31,327
- EMI after transfer
- ₹29,542
- Monthly saving
- ₹1,785
- Interest saved
- ₹3,21,220
- Breakeven
- 15 months
You recover the switching cost in 15 months, well inside the 180 months left on the loan.
How a balance transfer worksReading the result
Breakeven is the number that matters
Almost any rate cut produces a lower EMI, which is why headline savings look compelling. The honest test is different: you pay the switching cost today and collect the saving slowly, month by month. Breakeven is the point at which the accumulated saving finally covers what you spent to get it.
The costs to count
- Processing fee on the new loan, usually a percentage of the transferred balance, plus GST.
- Legal and technical valuation charges, since the new lender revalues the property and re-verifies title.
- Stamp duty on the fresh mortgage, which varies by state and can be the largest single item.
- Foreclosure charges from your existing lender, if the loan is on a fixed rate.
Two ways to take the saving
Once the transfer is done you can keep the lower EMI, which frees up monthly cash flow, or keep paying the old EMI amount against the cheaper loan, which shortens the tenure and saves considerably more interest overall. The second option is almost always the better deal if your budget already absorbs the old EMI.
Try repricing first
Before committing to a transfer, ask your current lender to reprice the loan. Many will move an existing borrower closer to their current card rate for a modest conversion fee — no fresh legal work, no stamp duty, no new paperwork. A written offer from a competing lender makes that conversation much shorter.
FAQs
Balance transfer questions, answered
How do I know if a balance transfer is worth it?
Compare the interest you would save over the remaining tenure against the full cost of switching — processing fee, legal and valuation charges, and stamp duty on the new mortgage. If the saving exceeds the cost well before the loan ends, the transfer pays off. The breakeven figure above is the month your switching cost is recovered.
Why does a transfer stop making sense late in a loan?
Because of how reducing-balance interest works. Early EMIs are mostly interest and later ones are mostly principal, so by the final years there is little interest left to save. Switching then means paying fresh fees to save very little, which is why breakeven often falls beyond the remaining tenure.
Will my existing lender charge me to leave?
RBI guidance bars foreclosure and prepayment penalties on floating-rate loans taken by individual borrowers, so for most home loans the exit itself is free. Fixed-rate loans can still carry a charge — include it in the switching cost above if it applies to you.
Can I negotiate with my current lender instead?
Very often, yes, and it is worth trying first. Many lenders will reprice an existing loan for a conversion fee that is far smaller than the cost of a full transfer. Getting a written offer from another lender gives you something concrete to negotiate with.
Does a balance transfer hurt my credit score?
Only briefly. The new lender runs a hard enquiry and a new account appears on your report, which can dip the score slightly. The old loan is reported as closed rather than defaulted, and the score normally recovers within a few months of on-time EMIs.
Compare what other lenders would charge you
Checking offers is a soft enquiry, so your credit score is not affected.