Moving the outstanding loan to a lower rate: new EMI, interest saved after the transfer costs, and when the move pays for itself.
When moving the loan pays off
A balance transfer moves the outstanding loan to another lender at a lower rate. It costs money — processing and legal fees, stamp duty on the new mortgage, and sometimes a charge from the current lender — so the interest saved has to be larger than those costs.
Saving = interest if you stay − interest after moving − transfer costs
Break-even
The break-even month is the first month in which the interest saved so far is at least the transfer costs. If you might sell the property or close the loan before then, moving may not be worth it.
Things to compare
- Keep the same remaining tenure to see the pure rate effect.
- A longer new tenure lowers the EMI but adds interest.
- Ask your current lender for a lower rate first; it may cost less than moving.
Results are worked out from the numbers you enter and are for planning only. They are not an offer, an approval or financial advice. Finobazaar does not assume any lender's rate or rules; the lender's loan agreement and its key fact statement decide the actual EMI and charges.