PSU Bank Home Loan Interest Rate Comparison — Q3 2026

Methodology & disclaimer: Rates below are compiled from each bank's publicly published MCLR/repo-linked lending rate (RLLR) notices and home loan product pages as of September 2026, cross-checked against the rate ranges quoted to Clean EMI applicants during Q3 2026 (July–September). The floor rate assumes a CIBIL score of 750+ and salaried income; applicants with scores between 700–749 or self-employed income typically see the higher end of the range. Final interest rates are set entirely by the bank at sanction — Clean EMI facilitates the application and cannot guarantee any rate. Rates are updated each quarter as banks revise their MCLR/RLLR.

Key findings — 5 takeaways

Bank of Baroda offers the lowest floor rate at 8.40% p.a. for CIBIL 750+ salaried applicants.
PNB and Bank of India are tied for second-lowest floor at 8.45% p.a.
The spread between best and worst floor rate across all 12 PSU banks is 40 basis points (8.40% vs 8.80%).
Top-end rates (lower CIBIL, self-employed, or higher LTV) range up to 10.00% across the 12 banks.
All 12 banks offer repo-rate-linked (RLLR-based) pricing, meaning rates move with RBI policy — the last reduction was in April 2026.

Home Loan Interest Rate Range — 12 PSU Banks, Q3 2026

Bank	Floor rate (CIBIL 750+, salaried)	Ceiling rate (lower CIBIL / self-employed)	Rate type	Processing fee
Bank of Baroda	8.40% p.a.	9.60% p.a.	Repo-linked (RLLR)	0.50% of loan amount (min ₹8,500)
Punjab National Bank	8.45% p.a.	9.70% p.a.	Repo-linked (RLLR)	0.35% (min ₹2,500, max ₹15,000)
Bank of India	8.45% p.a.	9.70% p.a.	Repo-linked (RLLR)	0.25% (min ₹1,500, max ₹20,000)
State Bank of India	8.50% p.a.	9.65% p.a.	MCLR-based	0.35% (min ₹2,000, max ₹10,000)
Union Bank of India	8.50% p.a.	9.65% p.a.	Repo-linked (RLLR)	0.50% (min ₹2,000)
Canara Bank	8.55% p.a.	9.75% p.a.	Repo-linked (RLLR)	0.50% (min ₹1,500, max ₹10,000)
Indian Bank	8.60% p.a.	9.80% p.a.	Repo-linked (RLLR)	0.25% (min ₹2,000, max ₹20,000)
Bank of Maharashtra	8.60% p.a.	9.80% p.a.	MCLR-based	₹5,000 flat
Central Bank of India	8.65% p.a.	9.85% p.a.	MCLR-based	0.50% (min ₹1,000, max ₹20,000)
Indian Overseas Bank	8.70% p.a.	9.90% p.a.	Repo-linked (RLLR)	0.50% (min ₹1,500, max ₹15,000)
UCO Bank	8.75% p.a.	9.95% p.a.	MCLR-based	0.50% (min ₹1,500, max ₹15,000)
Punjab & Sind Bank	8.80% p.a.	10.00% p.a.	MCLR-based	0.25% (max ₹25,000)

Note: Rates are indicative, based on published MCLR/RLLR as of Sep 2026. Final rate is set by the bank at sanction.

How CIBIL Score Affects the Rate — Typical Bands Across PSU Banks

CIBIL Score Band	Typical premium over floor rate	Effect on a ₹50 lakh / 20-year loan
800 and above	Floor rate (best tier)	EMI ≈ ₹43,400 at 8.40%
750–799	Floor to floor +25 bps	EMI ≈ ₹43,400–₹44,000
725–749	+25 bps to +50 bps	EMI ≈ ₹44,000–₹44,600
700–724	+50 bps to +100 bps	EMI ≈ ₹44,600–₹45,800
Below 700	Not eligible on this portal	—

Note: These bands are indicative; each bank applies its own grid. Salaried applicants with government/PSU employer status often get a 5–10 bps concession within each band.

Why PSU bank rates look lower than private banks — and the catch

PSU bank home loan rates have consistently undercut large private banks by 30–75 basis points over the past two years. On a ₹60 lakh loan over 20 years, 50 bps difference works out to roughly ₹2.1 lakh in additional interest paid to a private bank over the tenure — a real number, not a rounding error.

The catch is processing time and branch dependence. PSU banks take 5–15 working days for sanction (after complete documents) compared to some private banks' 3–7 days, and the final decision — amount, rate, tenure — is made at the branch level after physical document verification, not centrally by an algorithm. That's why an aggregation service like Clean EMI's home loan facilitation exists: matching an applicant's profile to the right branch of the right bank, before sending the file, is what keeps sanction rates high.

MCLR vs repo-linked rates in 2026: which resets faster?

Of the 12 banks above, 8 now price home loans on a repo-rate-linked (RLLR) basis and 4 still use MCLR. The difference matters when the RBI cuts rates (as it did in April 2026): RLLR loans reset within 3 months of a rate cut (tied to the RBI's repo announcement cycle), while MCLR loans reset on the loan's contractual reset date — often annually — meaning borrowers on MCLR can wait up to a year before seeing a rate reduction in their EMI.

For a borrower taking a new loan now, RLLR is the better choice in a rate-cut environment (which the April 2026 cut signals). SBI and a few others still default new customers to MCLR; it's worth explicitly asking the branch for RLLR pricing if you're with one of the MCLR-based banks in the table above.

Which bank should you apply through Clean EMI?

The answer depends on your profile, not just the headline rate. Here's how to think about it:

CIBIL 750+ salaried, target the floor: Bank of Baroda, PNB, and Bank of India have the three lowest floors in Q3 2026. Clean EMI's matching algorithm will route your application to whichever of these has the most efficient branch in your city.
CIBIL 700–749: The rate premium above is consistent across banks, so processing speed and branch accessibility matter more. SBI and Union Bank have the widest branch footprints across Tier 2–3 cities.
Self-employed / business income: Indian Bank and Bank of Maharashtra have shown better underwriting flexibility for non-salaried income documentation in our Q3 2026 applicant data, even though their floor rates are slightly higher.

Check eligibility and start an application through the Home Loan page — the eligibility form takes 3 minutes and the CIBIL pull is soft (no score impact).

Q2 2026 vs Q3 2026: what changed?

Following the April 2026 RBI rate cut (25 bps), all eight RLLR-linked banks in this table reduced their home loan floors by 20–25 bps. The four MCLR-based banks (SBI, Bank of Maharashtra, Central Bank, UCO Bank, Punjab & Sind Bank) have partially passed on the cut: SBI's 1-year MCLR moved down 15 bps, the others by 10 bps. Net effect: a Q3 2026 borrower starting a fresh ₹50 lakh / 20-year loan saves roughly ₹650–750/month on EMI compared to a Q2 2026 borrower at the same credit profile.

The next RBI Monetary Policy Committee meeting is scheduled for October 2026. Rate watch: consensus among economists is a 25 bps hold in October and a possible further 25 bps cut in December. We will update this table in our Q4 2026 edition.

Common questions

Frequently Asked Questions

Are the rates in this comparison guaranteed?

No. The rates shown are indicative, compiled from published rate cards and Q3 2026 applicant data. Final interest rate is set entirely by the bank at sanction, based on your CIBIL score, income, loan-to-value ratio and other underwriting factors. Clean EMI cannot guarantee any rate.

How often is this data updated?

We publish a fresh rate comparison each quarter (Q1–Q4). Within a quarter, we update this page if any bank makes a significant mid-quarter revision to its home loan rates.

What is the RLLR rate and how does it differ from MCLR?

RLLR (Repo-Linked Lending Rate) is tied directly to the RBI's repo rate and resets within 3 months of any policy change. MCLR (Marginal Cost of Funds-based Lending Rate) is set by each bank internally and resets on the loan's contractual reset date, which can be annual — meaning EMI relief from an RBI rate cut reaches MCLR borrowers more slowly.

What processing fees do PSU banks charge?

Processing fees range from ₹5,000 flat (Bank of Maharashtra) to 0.50% of the loan amount (several banks), capped at ₹10,000–₹25,000 depending on the bank. These are distinct from Clean EMI's facilitation service, which is free to the applicant.

Can I negotiate a lower rate with a PSU bank?

Within limits. Borrowers with CIBIL scores above 800, government/PSU employment, or existing banking relationships (salary account, long-standing customer) often receive concessions of 5–20 bps. Clean EMI's bank-matching process takes these factors into account before routing your file.

PSU Bank Home Loan Interest Rate Comparison — Q3 2026 (Jul–Sep)