About this calculator
Indian home loans float with the repo rate, but not all lenders pass cuts at the same speed — so a loan taken in a high-rate year can sit 0.75–1.5 points above what the same borrower would be offered today. A balance transfer (the lender calls it a takeover loan) moves the outstanding balance to a cheaper lender. The arithmetic that decides it is not the rate gap but three numbers together: the interest saved over the remaining tenure, the fees to switch (processing fee plus GST, MODT/franking charges, legal and valuation, occasionally an exit fee at the old lender), and how long you will actually keep the new loan — the break-even month below is when cumulative interest saved first covers the fees.
Two traps are built into the sales pitch, and the calculator exposes both. First, the tenure reset: the new lender restarts your loan over a fresh 20–30 years, so the EMI falls dramatically while total interest can quietly rise — set the new tenure equal to your remaining tenure for an honest comparison before you let it stretch. Second, lost subsidies: if your loan carries a PMAY-U 2.0 interest subsidy, transferring ends it, so the instalments forfeited belong on the fee side of your decision. A top-up loan is often bundled into the offer at the same rate — genuinely useful for renovation, but it is new borrowing, not a saving, and it is why only the interest comparison is modelled here.
How to use it
- Enter the outstanding balance and rate on your current loan, and the years left on it.
- Enter the new lender’s rate — and set the new tenure to your remaining tenure first, whatever the offer letter says.
- Add the processing fee percentage and the flat charges (MODT, legal, valuation) quoted to you.
- Read the net saving, then the break-even month: only switch if you are confident you will keep the loan past it.
- Try stretching the new tenure afterwards to see exactly how much of the "saving" was just a longer loan.
The formula
Both loans are run month by month on the standard reducing-balance formula at their own rate and tenure over the same outstanding balance. Comparing cumulative interest, rather than EMI, is what makes the break-even honest: an EMI cut achieved by stretching the tenure shows up as negative interest saved, not as a win.
Worked example
An outstanding balance of ₹50,00,000 with 18 years left at 9.25%: staying costs an EMI of ₹47,606 and about ₹52.83 lakh of further interest. Switching to 8.50% over the same 18 years cuts the EMI to ₹45,273 and the remaining interest by about ₹5.04 lakh; against ₹35,000 of fees (0.5% processing + ₹10,000 charges) the net saving is about ₹4.69 lakh, and the switch breaks even in its first few months. Stretch the new loan to 25 years instead and the EMI falls to roughly ₹40,260 — while the interest saving largely evaporates, which is the tenure trap in action.
Sources: Standard reducing-balance amortization applied to both loans month by month; fee ranges reflect Indian lender practice (processing 0.25–1% plus GST, MODT/franking and legal charges) and the RBI bar on prepayment penalties for floating-rate individual home loans. Last updated: October 2026.
Frequently asked questions
How much rate difference makes a balance transfer worth it?
On a ₹50 lakh balance with 15+ years left, a gap of 0.50 points usually clears typical fees within the first year and saves several lakhs; a gap of 0.25 points can still pay, but the break-even stretches out and any plan to prepay or sell weakens it. Below about 0.25 points, or with under 5 years remaining, the fees and paperwork rarely earn their keep. Run your exact balance and remaining tenure — the balance size matters as much as the rate gap.
What fees does a balance transfer actually involve?
At the new lender: a processing fee of typically 0.25–1% of the balance plus 18% GST on it, MODT/franking charges for the memorandum of deposit of title deeds (state-specific, often 0.2–0.5% with caps), and legal/valuation fees of a few thousand rupees. At the old lender: no prepayment penalty may be charged on a floating-rate home loan to an individual (RBI rule), though a fixed-rate loan can carry one. Budget ₹25,000–60,000 all-in on a ₹50 lakh transfer.
Does a balance transfer hurt my credit score or PMAY subsidy?
The application adds a hard inquiry and the new loan restarts your credit history on that account — a small, temporary score effect if your record is otherwise clean. The PMAY effect is permanent: under the PMAY-U 2.0 interest subsidy scheme, transferring the loan to another lender makes you ineligible for the remaining instalments, so add the forfeited subsidy (up to ₹36,000 a year) to the fee side before switching.
My new EMI is much lower after the transfer. Is that the saving?
Not necessarily — it is the most common illusion in this market. If the new lender reset your tenure to a fresh 25–30 years, the EMI falls because the same debt is spread thinner, and total interest can end up higher than staying. The honest test is total interest over the same horizon: this calculator shows it directly, and the year-by-year table shows whether your balance also falls faster, not just your EMI.
What formula does this home loan balance transfer calculator — india calculator use?
Net saving = (interest remaining on the old loan − interest on the new loan) − (processing fee + other charges); break-even = first month where cumulative interest saved ≥ fees Both loans are run month by month on the standard reducing-balance formula at their own rate and tenure over the same outstanding balance. Comparing cumulative interest, rather than EMI, is what makes the break-even honest: an EMI cut achieved by stretching the tenure shows up as negative interest saved, not as a win. The worked example on this page applies the formula step by step with real numbers, so you can verify the result by hand.