What factors affect home loan balance transfer?

There are several key factors that impact a home loan balance transfer:

• Outstanding Principal Amount: The higher the outstanding amount, the greater the potential savings from switching to a lower interest rate.
• Current Interest Rate: If your current interest rate is high, you stand to gain more by transferring to a lower rate. Compare across financial institutions.
• New Interest Rate Offered: Evaluate if the new rate offered is sufficiently lower than your existing rate to justify the transfer.
• Processing Fees & Charges: Consider balance transfer fees and other charges the new loan provider may impose. These should not offset your interest savings.
• Transfer Timing: Transfers earlier in the tenure lead to higher overall savings compared to later transfers.
• Prepayment Penalties/Exit Costs: Check if your current loan provider charges any prepayment penalties or exit costs for transferring the loan.
• Loan Account Standing: Most financial institutions prefer active loan accounts in good standing for balance transfers.
• Credit Score: A higher credit score makes you eligible for lower rates from new loan providers.