Question 1

When is a home loan balance transfer worth it?

Accepted Answer

It is usually worth considering when the interest-rate gap is meaningful, remaining tenure is long, and switching costs are recovered quickly.

Question 2

What is break-even period in loan transfer?

Accepted Answer

Break-even period is the number of months required for EMI savings to recover processing fees and switching charges.

Question 3

Does balance transfer reduce tenure or EMI?

Accepted Answer

Most lenders calculate a new EMI for the remaining tenure, but borrowers may also request tenure reduction if cash flow allows.

Question 4

Should I include legal and valuation charges?

Accepted Answer

Yes. Add every processing, legal, valuation, documentation, insurance, and administrative cost into switching costs.