Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.
11 MAY, 2022
Most people dream of having their own place someday. However, with real estate being so expensive, it is no easy feat to afford a house. The good thing is that there are home loans that can provide the required finances to complete the property purchase. Now, financial institutions can keep updating their home loans to win more customers. So, those who have already taken a home loan and now find better plans out there can always opt for a home loan balance transfer. This involves transferring the home loan from one lender to another for reduced interest rates and better benefits.
However, before refinancing a home loan plan, it is advisable to make use of a home loan refinance calculator. This calculator, also known as a home loan balance transfer calculator, is an online tool that helps in displaying the revised monthly instalments of the new home loan plan. This way, it becomes very easy for a borrower to understand whether transferring their home loan would be a good move.
If you are thinking about transferring your home loan, head over to Kotak’s website and make use of the home loan balance transfer calculator for free.
Here’s how to use this calculator:
1. Mention the loan amount remaining to be cleared
This is the principal amount of the existing home loan that is outstanding. Now, do note that it is better if a major portion of the loan is left to be repaid. The reason for this is to capitalise on the revised terms that the new lender is offering. If most of the outstanding amount is already repaid, the borrower might not be able to make a significant saving by going for the home loan refinancing option.
2. Add the revised interest rate of the new loan
This refers to the revised home loan balance transfer interest rate that the new lender is offering. Now, the difference in the existing and revised interest rates might sometimes seem negligible. However, do keep in mind that even a slight change in the interest rate of a home loan can have quite a significant impact on the overall cost of the loan by bringing down the total payment towards the loan’s interest component.
3. Input the remaining tenure of the existing home loan
The calculator will also require details of the remaining repayment tenure of the existing home loan. It is considered best to opt for a home loan balance transfer when a large part of the repayment tenure is remaining. This is so that the borrower can repay most of the Equated Monthly Instalment (EMI) payments on the revised terms offered by the new lender.
Once the home loan balance transfer calculator is provided with this information, it will then display the EMI results in seconds! The best part is that the user can keep changing the details in the three fields to arrive at a new EMI result that is suitable for their budget.
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