Home Loan Balance Transfer Calculator
A lower rate only wins if you clear the transfer-cost breakeven
Home Loan Balance Transfer Calculator
Total interest, staying put
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Total interest, after transfer
0
Net savings after transfer costs
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The breakeven point is what actually matters
A lower rate always looks attractive, but if the transfer costs take years to recover through lower EMIs, and you might prepay or sell before then, the switch can be a net loss despite the "better" rate on paper.
Ask your current lender first
Many banks will match a competitor's rate for existing customers if you simply ask (a "retention rate") — often at zero transfer cost, since there's no new lender's paperwork or valuation involved.
Later years save less than they look
Since EMI is front-loaded with interest, a rate cut saves the most in the early years of a loan — transferring a loan that's already mostly through its tenure captures a smaller share of the theoretical benefit.
Interest totals are computed on the remaining balance and tenure using standard EMI amortization at each rate — a fresh amortization schedule assuming the loan restarts cleanly. Doesn't model a longer tenure being offered by the new lender (common, and can look attractive while paying more total interest), or the small chance the new lender re-underwrites you at a worse rate than advertised after valuation. Not financial advice.
Frequently asked questions
What is EMI and how is it calculated?
EMI (Equated Monthly Installment) is the fixed monthly payment that repays a loan over its tenure, made up of principal and interest combined. It's calculated from the loan amount, interest rate, and tenure using a standard amortization formula -- the same one this calculator uses, so you can see the exact monthly figure and how much of each payment goes to interest versus principal.Read more: The Credit Card Minimum Due Is Designed to Keep You Paying Forever
Does prepaying a loan actually save money?
Yes, almost always -- a prepayment reduces the outstanding principal, which reduces the interest charged on every remaining installment. The earlier in the loan you prepay, the more you save, since interest is front-loaded in most amortization schedules. Check for prepayment penalties with your lender first.Read more: The Insurance Hiding Inside Your Car Loan
What's the difference between flat rate and reducing balance interest?
Flat-rate interest is charged on the full original loan amount for the entire tenure, even as you pay it down -- reducing-balance interest is charged only on what's still outstanding, so it falls every month as you repay. A flat rate quoted at the same percentage as a reducing-balance rate is effectively much more expensive; always confirm which method a lender is using.Read more: Rate Hikes Travel First Class, Rate Cuts Walk
Will improving my credit score lower my loan interest rate?
Usually, yes. Lenders price risk into the interest rate they offer, and a higher credit score signals lower risk, which typically qualifies you for better rates. It varies by lender and loan type, but it's one of the few loan-cost factors largely within your control before you apply.Read more: The Credit Card Minimum Due Is Designed to Keep You Paying Forever
Estimates only, not financial advice. See our Disclaimer.
