Questioning when to modify your own home mortgage? This year-wise evaluation reveals the best time to switch your mortgage for max curiosity financial savings.
Many debtors really feel excited to modify their house mortgage each time rates of interest begin falling. However switching is just not so simple as selecting the financial institution providing the bottom charge. You will need to contemplate how lengthy your present mortgage has already run, the precise charge distinction, the processing and switch costs, and the remaining tenure. With out evaluating these components, blindly shifting to a brand new lender simply because the headline charge appears to be like decrease is probably not a wise or useful choice.
When Ought to You Change Your Dwelling Mortgage? Yr-by-Yr Information
Switching or transferring your own home mortgage to a different financial institution might appear to be a easy interest-rate choice, however in actuality, timing performs a a lot larger position than most debtors understand. Many individuals swap their mortgage too early out of concern or too late when their interest-saving potential is already gone.
This text supplies a clear, sensible, and totally data-backed evaluation so you possibly can confidently resolve when switching really makes monetary sense — and when it doesn’t.
You can find:
- 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 choice guidelines
All calculations are based mostly on an ordinary 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 Price: 8%
- New Price (if switched): 7.5%
- In case you swap throughout any 12 months, the remaining tenure = 20 – that 12 months
These numbers are practical approximations and carefully match precise financial institution EMI behaviour.
Why timing is extra essential than rate of interest
Many debtors assume switching relies upon solely on charge distinction (0.25%, 0.50%, 1%).
However the reality is:
The sooner you turn, the extra you save — even with a small charge discount.
The later you turn, the much less you save — even with an enormous charge discount.
This occurs as a consequence of how EMI is structured:
- In early years – EMI = largely curiositylittle or no principal
- In later years – EMI = largely principallittle or no curiosity
Therefore:
- A 0.50% charge minimize in 12 months 1 saves lakhs
- A 0.50% charge minimize in 12 months 18 saves virtually nothing
Understanding this easy level is the important thing to creating a sensible house mortgage choice.
Half 1: Yr-by-Yr Switching Financial savings
This desk reveals how a lot complete financial savings you get for those who switch the mortgage on the begin of every 12 months.
| Yr 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 |
Be aware – You need to use our FREE house mortgage calculator to calculate by yourself, “Prepay Dwelling Mortgage Calculator – Obtain Free Excel Sheet” and “Dwelling 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 Yr 15, financial savings turn into negligible.
Half 2: How a lot principal do you repay yearly?
You earlier requested “When will we end 10%, 20%, 30% of principal?”
This desk solutions that totally:
| Yr | 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 Yr 4 and 5
- 20% repaid – Round Yr 7–8
- 30% repaid – Round Yr 10
- 50% repaid – Round Yr 14
- 70% repaid – Round Yr 17
- 90% repaid – Round Yr 19
This clearly reveals why switching late hardly helps — as a result of most curiosity is already paid.
When do you have to really swap? (Sensible guidelines)
Greatest time to modify
Years 1 to five
- Very excessive excellent stability
- EMI largely 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 costs are low.
Assume twice
Years 11 to fifteen
Financial savings shrink to Rs.50,000 – Rs.1.8 lakh.
Change provided that the brand new charge is considerably decrease or switching is free/low cost.
Not advisable
Years 16 to twenty
Financial savings are virtually zero.
Most EMI is principal.
Switching is solely not definitely worth the problem.
Guidelines earlier than switching
1. Is your charge 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 costs
- Stamp obligation
- Admin costs
Evaluate complete value vs financial savings desk above.
3. Will you stick with the mortgage lengthy sufficient?
In case 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 provides a decrease charge for a small conversion charge — simpler than a full switch.
Last 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 – Reasonable financial savings
- Years 11–15: Provided that low charges or large charge minimize
- Years 16–20: Don’t swap – Financial savings are negligible
By understanding how principal and curiosity behave over your mortgage’s life, you can also make a sensible, assured switching choice that saves cash with out pointless paperwork.
