A home loan transfer gone wrong can cost you more than just the interest you were trying to save. Here are the top 5 mistakes to avoid.
Mistake 1: Not Checking the Reset Clause
Some banks offer a low teaser rate for year 1 that resets to a higher rate later. Always check the RLLR/MCLR link and reset frequency.
Mistake 2: Ignoring Legal & Stamp Duty Costs
Mortgage creation at the new lender requires fresh stamp duty and registration in some states — up to 0.5% of loan amount.
Mistake 3: Transferring When Tenure Is Too Short
If you have less than 7 years remaining, the interest component in your EMI is already small. The fees may outweigh savings.
Mistake 4: Not Negotiating With Current Lender First
Many banks will match or beat the competitor's offer to retain you. A single call can get you a 0.25–0.5% reduction without the paperwork hassle.
Mistake 5: Forgetting the Top-Up Opportunity
When transferring, you can request a top-up loan at home loan rates (8.5–9%) — far cheaper than a personal loan (11–18%) for renovation needs.