# Loan Refinancing & Balance Transfer Guide

## When Refinancing Makes Financial Sense
- **Interest Rate Differential**: A reduction of 0.50% to 0.75% or higher is typically needed to cover switching costs.
- **Switching Costs to Count**: New processing fee + 18% GST, MODT/mortgage stamp duty, legal & valuation fees, document retrieval fees.
- **Break-Even Formula**: `Break-Even Months = Total Switching Costs / Monthly EMI Savings`. If break-even occurs within 12-18 months and you plan to hold the loan longer, refinancing is advantageous.