Questioning when to change your own home mortgage? This year-wise evaluation reveals the perfect time to switch your mortgage for optimum curiosity financial savings.
Many debtors really feel excited to change their house mortgage every time rates of interest begin falling. However switching just isn’t so simple as selecting the financial institution providing the bottom fee. It’s essential to take into account how lengthy your present mortgage has already run, the precise fee distinction, the processing and switch expenses, and the remaining tenure. With out evaluating these components, blindly shifting to a brand new lender simply because the headline fee seems decrease is probably not a wise or helpful determination.
When Ought to You Change Your Residence Mortgage? 12 months-by-12 months Information
Switching or transferring your own home mortgage to a different financial institution might appear to be a easy interest-rate determination, however in actuality, timing performs a a lot larger position than most debtors understand. Many individuals change their mortgage too early out of concern or too late when their interest-saving potential is already gone.
This text offers a clear, sensible, and totally data-backed evaluation so you’ll be able to confidently resolve when switching truly makes monetary sense — and when it doesn’t.
You can see:
- A year-by-year financial savings desk (Years 1 to twenty)
- How a lot principal you repay every year
- When curiosity dominates, and when principal dominates
- The scientific “candy spot” for switching your own home mortgage
- When switching is a waste of cash
- A sensible determination guidelines
All calculations are primarily based on a typical EMI amortization mannequin.
Assumptions for the evaluation
To maintain the instance easy and relatable, we assume:
- Mortgage Quantity: Rs.1,00,00,000 (Rs.1 crore)
- Mortgage Tenure: 20 years (240 months)
- Present Curiosity Charge: 8%
- New Charge (if switched): 7.5%
- In the event you change throughout any 12 months, the remaining tenure = 20 – that 12 months
These numbers are reasonable approximations and carefully match precise financial institution EMI behaviour.
Why timing is extra essential than rate of interest
Many debtors suppose switching relies upon solely on fee distinction (0.25%, 0.50%, 1%).
However the reality is:
The sooner you turn, the extra you save — even with a small fee discount.
The later you turn, the much less you save — even with an enormous fee discount.
This occurs as a consequence of how EMI is structured:
- In early years – EMI = principally curiosity, little or no principal
- In later years – EMI = principally principal, little or no curiosity
Therefore:
- A 0.50% fee minimize in 12 months 1 saves lakhs
- A 0.50% fee minimize in 12 months 18 saves nearly nothing
Understanding this easy level is the important thing to creating a sensible house mortgage determination.
Half 1: 12 months-by-12 months Switching Financial savings
This desk reveals how a lot complete financial savings you get if you happen to switch the mortgage on the begin of every 12 months.
| 12 months of Switching | Excellent Stability (Rs.) | Years Left | Estimated Financial savings (Rs.) |
| 1 | 97,88,633 | 19 | 7,79,000 |
| 2 | 95,59,723 | 18 | 6,19,000 |
| 3 | 93,11,814 | 17 | 5,14,000 |
| 4 | 90,43,328 | 16 | 5,05,000 |
| 5 | 87,52,558 | 15 | 4,51,208 |
| 6 | 84,37,655 | 14 | 3,99,000 |
| 7 | 80,96,614 | 13 | 3,49,900 |
| 8 | 77,27,268 | 12 | 3,02,954 |
| 9 | 73,27,265 | 11 | 2,58,669 |
| 10 | 68,94,063 | 10 | 2,17,231 |
| 11 | 64,24,905 | 9 | 1,78,814 |
| 12 | 59,16,807 | 8 | 1,43,599 |
| 13 | 53,66,538 | 7 | 1,11,768 |
| 14 | 47,70,596 | 6 | 83,510 |
| 15 | 41,25,191 | 5 | 59,018 |
| 16 | 34,26,290 | 4 | 38,486 |
| 17 | 26,69,900 | 3 | 22,115 |
| 18 | 18,52,215 | 2 | 10,107 |
| 19 | 9,69,384 | 1 | 2,666 |
| 20 | 0 | 0 | 0 |
Notice – You need to use our FREE house mortgage calculator to calculate by yourself, “Prepay Residence Mortgage Calculator – Obtain Free Excel Sheet” and “Residence Mortgage EMI Calculator 2025 – Obtain Free Excel Sheet“.
Key takeaway
The most switching profit occurs throughout:
Years 1 to five ? Financial savings between Rs.4.5 to Rs.7.8 lakh
Years 6 to 10 nonetheless present reasonable financial savings.
After 12 months 15, financial savings turn into negligible.
Half 2: How a lot principal do you repay yearly?
You earlier requested “When can we end 10%, 20%, 30% of principal?”
This desk solutions that totally:
| 12 months | Excellent (Rs.) | Principal Repaid (Rs.) | % of Principal Repaid |
| 1 | 97,88,633 | 2,11,367 | 2.11% |
| 2 | 95,59,723 | 4,40,277 | 4.40% |
| 3 | 93,11,814 | 6,88,186 | 6.88% |
| 4 | 90,43,328 | 9,56,672 | 9.57% |
| 5 | 87,52,558 | 12,47,442 | 12.47% |
| 6 | 84,37,655 | 15,62,345 | 15.62% |
| 7 | 80,96,614 | 19,03,386 | 19.03% |
| 8 | 77,27,268 | 22,72,732 | 22.73% |
| 9 | 73,27,265 | 26,72,735 | 26.73% |
| 10 | 68,94,063 | 31,05,937 | 31.06% |
| 11 | 64,24,905 | 35,75,095 | 35.75% |
| 12 | 59,16,807 | 40,83,193 | 40.83% |
| 13 | 53,66,538 | 46,33,462 | 46.33% |
| 14 | 47,70,596 | 52,29,404 | 52.29% |
| 15 | 41,25,191 | 58,74,809 | 58.75% |
| 16 | 34,26,290 | 65,73,710 | 65.74% |
| 17 | 26,69,900 | 73,30,100 | 73.30% |
| 18 | 18,52,215 | 81,47,785 | 81.48% |
| 19 | 9,69,384 | 90,30,616 | 90.31% |
| 20 | 0 | 1,00,00,000 | 100.00% |
Principal milestones
- 10% repaid – Between 12 months 4 and 5
- 20% repaid – Round 12 months 7–8
- 30% repaid – Round 12 months 10
- 50% repaid – Round 12 months 14
- 70% repaid – Round 12 months 17
- 90% repaid – Round 12 months 19
This clearly reveals why switching late hardly helps — as a result of most curiosity is already paid.
When do you have to truly change? (Sensible guidelines)
Greatest time to change
Years 1 to five
- Very excessive excellent stability
- EMI principally going to curiosity
- Even a 0.25–0.40% discount saves lakhs
Good time to think about switching
Years 6 to 10
Financial savings nonetheless round Rs.2–4 lakh.
Worthwhile if switching expenses are low.
Suppose twice
Years 11 to fifteen
Financial savings shrink to Rs.50,000 – Rs.1.8 lakh.
Change provided that the brand new fee is considerably decrease or switching is free/low-cost.
Not advisable
Years 16 to twenty
Financial savings are nearly zero.
Most EMI is principal.
Switching is just not well worth the problem.
Guidelines earlier than switching
1. Is your fee distinction significant?
- Better than or equal to 0.30% ? Good
- Better than or equal to 0.40% ? Excellent
- Better than or equal to 0.50% ? Change instantly (early years)
2. Are the switching prices low?
Add:
- Processing charge
- Authorized & valuation
- MOD cancellation expenses
- Stamp obligation
- Admin expenses
Examine complete value vs financial savings desk above.
3. Will you stick with the mortgage lengthy sufficient?
In the event you plan to:
- prepay in subsequent 1–2 years
- promote the property quickly
Then switching is probably not helpful.
4. Did you strive inner conversion?
Typically your present financial institution gives a decrease fee for a small conversion charge — simpler than a full switch.
Remaining Abstract
So, when ought to you turn your own home mortgage?
- Years 1–5: Change with out hesitation – Highest financial savings
- Years 6–10: Nonetheless good – Average financial savings
- Years 11–15: Provided that low charges or large fee minimize
- Years 16–20: Don’t change – Financial savings are negligible
By understanding how principal and curiosity behave over your mortgage’s life, you can also make a sensible, assured switching determination that saves cash with out pointless paperwork.
