Is a balance transfer worth the cost? Run this test
Rate saving beats switching cost only when the gap and the residual tenure are both large enough.
4 min read
What you need to know
Add up the total cost of switching — processing fee, legal and technical charges, stamp duty on the fresh mortgage, and any franking. Then compute total interest on the existing loan for the residual tenure, and the same figure at the new rate.
A useful rule: transfer when the rate gap is at least 0.5% and at least ten years of tenure remain. Before that, ask your existing lender for a rate conversion — many will reprice for a small one-time fee, which is cheaper than a full transfer.
Continue your research
Use this guide alongside our product details and eligibility criteria before choosing a lender.
Frequently asked questions
What is the main takeaway from “Is a balance transfer worth the cost? Run this test”?
Rate saving beats switching cost only when the gap and the residual tenure are both large enough.
What should I check before acting on this home loans guide?
Review the practical points in the guide against your income, obligations, documents and lender requirements.
Can the information in this guide guarantee loan approval?
No. It is general educational information. A bank or NBFC makes the final decision after checking your credit profile, repayment capacity, documents and the applicable product policy.
How can iFINTRUST help after I read this guide?
An iFINTRUST advisor can review your requirement, explain the documents normally requested and help you compare suitable lending options before you apply.