Questioning when to change 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 change their residence mortgage each time rates of interest begin falling. However switching will not be so simple as selecting the financial institution providing the bottom charge. It’s essential to take into account how lengthy your present mortgage has already run, the precise charge distinction, the processing and switch fees, and the remaining tenure. With out evaluating these elements, blindly shifting to a brand new lender simply because the headline charge seems to be decrease is probably not a smart or useful resolution.
When Ought to You Change Your Dwelling Mortgage? 12 months-by-12 months Information
Switching or transferring your own home mortgage to a different financial institution could appear to be a easy interest-rate resolution, however in actuality, timing performs a a lot greater function than most debtors notice. Many individuals change their mortgage too early out of worry 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 determine when switching really makes monetary sense — and when it doesn’t.
You’ll discover:
- 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 resolution guidelines
All calculations are primarily based 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 Charge: 8%
- New Charge (if switched): 7.5%
- For those who change throughout any yr, the remaining tenure = 20 – that yr
These numbers are practical approximations and intently match precise financial institution EMI behaviour.
Why timing is extra necessary 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 result of how EMI is structured:
- In early years – EMI = largely curiosity, little or no principal
- In later years – EMI = largely principal, little or no curiosity
Therefore:
- A 0.50% charge minimize in yr 1 saves lakhs
- A 0.50% charge minimize in yr 18 saves nearly nothing
Understanding this easy level is the important thing to creating a sensible residence mortgage resolution.
Half 1: 12 months-by-12 months Switching Financial savings
This desk reveals how a lot whole financial savings you get should you switch the mortgage on the begin of every yr.
| 12 months of Switching | Excellent Steadiness (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 residence 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 12 months 15, financial savings change 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:
| 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 must you really change? (Sensible guidelines)
Finest time to change
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 contemplate switching
Years 6 to 10
Financial savings nonetheless round Rs.2–4 lakh.
Worthwhile if switching fees 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 nearly zero.
Most EMI is principal.
Switching is solely not well worth the trouble.
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% ? Superb
- Better than or equal to 0.50% ? Change instantly (early years)
2. Are the switching prices low?
Add:
- Processing charge
- Authorized & valuation
- MOD cancellation fees
- Stamp responsibility
- Admin fees
Evaluate whole value vs financial savings desk above.
3. Will you stick with the mortgage lengthy sufficient?
For those who plan to:
- prepay in subsequent 1–2 years
- promote the property quickly
Then switching is probably not helpful.
4. Did you attempt inside conversion?
Generally your present financial institution affords 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 – Average financial savings
- Years 11–15: Provided that low charges or massive charge minimize
- Years 16–20: Don’t change – Financial savings are negligible
By understanding how principal and curiosity behave over your mortgage’s life, you may make a sensible, assured switching resolution that saves cash with out pointless paperwork.
