A balance transfer involves moving your existing outstanding loan balance from your current lender to a new lender, usually because the new lender is offering a meaningfully lower interest rate, better terms, or superior service. The new lender essentially pays off your remaining balance with the old lender, and you then continue repaying the same outstanding amount, but under the new lender's terms.
Balance transfers can result in genuine savings, especially for large, long-tenure loans like home loans, where even a small reduction in interest rate can add up to a significant amount over the remaining years. However, it's worth factoring in processing fees and other charges associated with the transfer, and comparing the total cost of switching against the interest savings, to ensure the move genuinely makes financial sense rather than just looking attractive on the surface.