Home Loan Transfer Charges

Step-by-Step Process of Transferring a Home Loan

Here are the steps to be taken in case you want to transfer your home loan -

STEP 1: Notify Your Current Bank

First, notify your existing bank of your intention to transfer the Home Loan and explain why. Depending on your bank's requirements, you may need to submit an application form or a letter. 

STEP 2: Obtain an NOC

Your present lender will give a No Objection Certificate (NOC) or a letter of consent after you notify them. This paperwork is critical for starting the transfer process with the new lender.

STEP 3: Submit Documents

Send the documentation to your new lender. These documents could include KYC paperwork, property-related documents, loan balances, and interest statements.

STEP 4: Closure Confirmation

Following document verification, the new lender will send a check or draft in favor of your current lender for the remaining loan balance. Your current lender will confirm the closing of your existing loan account after receiving the payment. 

STEP 5: Pay the New EMIs

You can now begin making loan payments to the new bank based on the new conditions and interest rates.

Home Loan Transfer Charges

Even though the RBI has barred banks from charging foreclosure penalties on floating-rate home loans, there are still other charges you must account for.

The charges vary widely based on the lenders. Please check with your respective lender before applying.

How to Judge Whether the Transfer is Worth It?

Before you transfer your home loan, calculate and compare the expected savings from lower interest vs the total transfer costs above. If costs are more than you’ll save over the foreseeable time, don’t transfer.

Here is an example to understand better -

• Outstanding principal: ₹40 Lakh

• Current rate: 9.50%

• New rate offered: 8.50%

• Tenure left: 15 years

Even if interest savings look big, if total charges (processing + legal + valuation, etc.) add up to ₹1 Lakh or more, the net benefit may get cut.

You must also consider the following things -

• Number of years left to pay

• Difference in the rate of interest

• Plans to prepay or foreclose the loan

Make sure to always ask for a full cost sheet before finalizing the transfer.

Home Loan Balance Transfer Interest Rates

Here are some indicative balance transfer rates offered by popular lenders -

Note: These rates are as mentioned on the bank websites on 29 September 2025. Please get in touch with your bank before applying.

Who is Eligible for a Home Loan Balance Transfer?

Applicants for house loan transfers must meet the following criteria:

• You must be an Indian citizen or a non-resident Indian.

• You must be in the age range of 23 to 65 years.

• You should be salaried or self-employed, with a stable income stream.

• The property must be ready to move into or already occupied.

• A minimum of 12 monthly payments or EMIs must have been made with the current lender.

• There should be no outstanding payments on your current loan.

• You should have a clear payment record with no defaults.

** Eligibility criteria vary depending on the lender

What are the Documents Required for a Home Loan Balance Transfer?

To apply for the home loan balance transfer, you will need the following documents:

• PAN Card

• Photo identity proof

• Address proof

• Income proof with self-attestation

In addition to the basic documents listed above, you may also need to provide:

• A letter from the current lender, explaining the list of property documents in their possession.

• Send a copy of your most recent outstanding balance letter on letterhead from your present bank.

• A copy of the title deeds (with Own Contribution Proof)

Benefits of a Home Loan Balance Transfer

Some borrowers choose home loan balance transfers. This is due to the numerous benefits provided by this facility. Here are some advantages of house loan balance transfers.

• Lower Interest Rates

Low interest rates result in lower EMIs and overall loan costs. We know that houses cost an arm and a leg, so, a small decrease in interest rates could save you a significant amount of money.

• Better Tenure

A balance transfer allows you to adjust your current tenure. You no longer have to make such large payments. Instead, you can just extend the tenure if necessary.

• Top Up Facilities

You may need more funds for house renovations or repairs. When you complete a balance transfer, you can apply for a top-up loan to help you improve your living environment.

• Better Service

Finally, a balance transfer might move your present house loan to a new lender who will most likely provide you with superior customer care as well as other financial benefits. 

When Should You Opt for a Balance Transfer?

The primary reason you would contemplate a home loan balance transfer is better terms and tenure. The following scenarios show an ideal timing for such a transfer - 

• It is early in your home loan tenure. The interest component is high at this time. So a transfer at this time may reduce your expenses.

• If you have a big outstanding balance and lowering interest rates might be beneficial.

However, if you owe only 5% - 10% of the loan amount, the additional paperwork and formalities for a balance transfer would be insignificant and unnecessary.

• You plan to stay with the new loan for several years to recover transfer costs.

• The rate difference between the current and the new lender is at least 0.50% to 1.00%.

Conclusion

A home loan balance transfer can help you save significantly by reducing EMIs, cutting down on interest outgo, and even offering additional funds through top-ups. But before making the switch, carefully compare home loan transfer charges against potential savings.

You can get home loans through Moneyview starting from 8.50% p.a. Check your eligibility today and apply by visiting our website or downloading the Moneyview app.