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Loan balance transfer.
Another bank offers a lower rate. Switching costs fees up front and saves interest over time. This says whether the saving clears the fees, and how soon.
Processing fee, legal and valuation charges, stamp duty on the new agreement. Floating-rate home loans have no foreclosure charge.
The answer
Switch.
You save ₹2,96,220 after fees, and the lower EMI pays the fees back in 1 yr 3 mos. Ask your bank to match the rate first.
Stay
₹31,327/mo
- Rate
- 9.5%
- Interest left
- ₹26.4 L
Switch
Better₹29,542/mo
- Rate
- 8.5%
- Interest left
- ₹23.2 L
- Plus fees
- ₹25,000
How it adds up
- Interest if you stay₹26,38,813
- minusInterest if you switch₹23,17,594
- minusCost of switching₹25,000
- equalsYou save₹2,96,220
What this assumes
Keeps the remaining tenure the same and the new rate fixed. Fees include processing, legal, valuation and any foreclosure charge from the old lender. Ask your current bank to match the rate first; it often costs nothing.
Rules and rates from
- Reserve Bank of India (opens in a new tab)
- The reducing-balance EMI formula banks use
Education only, not investment, tax or legal advice. I am not a SEBI-registered investment adviser.
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