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When should I transfer my home loan to another bank?
Updated · CardKhoj Editorial Team
Short answer
A home loan balance transfer usually makes sense when the new lender's rate is at least 0.5% lower and you have 10 or more years left on the loan. First ask your current bank to reduce your rate — many will reprice for a small fee — and compare the savings with the new lender's processing, legal and stamp duty costs.
Checklist
- Rate difference: 0.5% or more.
- Remaining tenure: ideally 10+ years, since most interest is paid early.
- Outstanding amount: larger balances save more.
- Repayment record: you need a clean record for at least 12 months.
Costs to include
- Processing fee at the new lender
- Legal and technical valuation fees
- Stamp duty on the new mortgage (varies by state)
Try repricing first
Banks often offer existing customers a “conversion” to a lower spread for a one-time fee. It is quicker and cheaper than moving, and avoids paperwork. Use a competing offer letter as leverage.
This answer is general information, not personalised financial or tax advice. Rules, rates and limits change — confirm with your bank, the RBI or a qualified adviser before making decisions.