Punjab National Bank (PNB) is India’s second-largest public-sector bank and a perennial contender for the cheapest home loan among PSU lenders. Rates for Govt/Defence/PSU employees start at 8.50% — in the same band as SBI — and processing fees (0.35%) are the lowest across major lenders. Women borrowers and first-time buyers under the Awas scheme get additional concessions. Full 2026 breakdown below.
Quick snapshot (FY 2026-27)
- Starting rate: 8.50% p.a. for Govt/Defence/PSU + CIBIL 760+ salaried
- Women concession: 5 bps below standard rate
- Maximum tenure: 30 years (or age 70 at maturity)
- Maximum LTV: 90% for loans ≤ ₹30L, 80% for ₹30L-₹75L, 75% above ₹75L (RBI cap)
- Processing fee: 0.35% + 18% GST (lowest among majors)
- Sanction turnaround: 5-10 days for salaried; longer for under-construction
- Prepayment: zero on floating-rate; 2% on fixed-rate portion
Model your EMI on the PNB Home Loan EMI Calculator with PNB starting rate pre-filled.
Current rates by profile
| Borrower profile | CIBIL 760+ | CIBIL 720-759 | CIBIL 680-719 |
|---|---|---|---|
| Govt / Defence / PSU (men) | 8.50% | 8.75% | 9.10% |
| Govt / Defence / PSU (women) | 8.45% | 8.70% | 9.05% |
| Salaried private (men) | 8.65% | 8.90% | 9.25% |
| Salaried private (women) | 8.60% | 8.85% | 9.20% |
| Self-employed (professional) | 8.85% | 9.10% | 9.50% |
| Self-employed (business) | 9.00% | 9.25% | 9.65% |
| PNB Awas (affordable, sub-₹35L) | 8.55% | 8.80% | 9.15% |
Indicative FY 2026-27 rates. Always verify on pnbindia.in → Loans → Home Loan → Interest Rates. RLLR-linked, reset quarterly.
PNB home loan variants
1. PNB Housing Scheme (regular home loan)
Standard EMI-based term loan for new purchase, construction, extension, or ready-to-move property. Repo-linked, reset quarterly. Default choice for salaried and self-employed borrowers with straightforward income profiles.
2. PNB Awas Home Loan (PMAY-CLSS)
Affordable-housing product for first-time buyers with household income up to ₹18L (MIG-II category), on properties up to ₹50L stamp value. Bundles PMAY-CLSS (Credit-Linked Subsidy Scheme) where eligible — up to ₹2.67L upfront interest subsidy for EWS/LIG categories, ₹2.35L for MIG-I (₹6-12L household income), ₹2.30L for MIG-II (₹12-18L). Apply through PNB branches; eligibility documents reviewed by PMAY cell.
3. PNB Top-Up Home Loan
Existing PNB home loan holders (12+ months clean repayment) qualify for a top-up at the prevailing rate. Useful for renovation, education funding, or business capital without paying processing fee on a fresh loan. Section 24(b) deduction applies only if the top-up is used for property improvement.
4. PNB Home Loan for NRIs
PNB offers dedicated home loan products to NRIs with income proof from foreign employers. Indian co-applicant typically required. Tenure capped at borrower’s return-to-India or 65 years, whichever earlier. Rates are in line with resident-salaried pricing.
Eligibility checklist
- Age: 21 at application, 70 at loan maturity (salaried); 65 for self-employed
- Minimum income: ₹20K/month net salaried, ₹5L audited PAT for self-employed
- Employment stability: 2+ years total employment, 1+ year current employer (salaried); 3+ years continuous business (self-employed)
- FOIR: total EMIs (including proposed home loan) ≤ 55-65% of net monthly income
- Property: PNB-approved projects for under-construction; clear title for ready-to-move. PNB is more flexible on rural / semi-urban properties than private banks.
Documents required
- KYC: PAN, Aadhaar (or alternate OVD), passport-size photos
- Salaried income proof: last 3 payslips, last 6 months’ salary-account statement, Form 16 for 2 FYs or filed ITRs
- Self-employed income proof: last 3 FYs ITR + computation, P&L + balance sheet, 6-12 months’ current-account statement, GST registration
- Property documents: agreement to sell, builder NOC, approved plan, OC/CC for ready, chain of title, encumbrance certificate
- Down payment proof: bank balance or investment statements
Processing fee + closing cost
PNB’s 0.35% processing fee is the lowest among major lenders — 15 bps cheaper than SBI (0.50%), 15 bps cheaper than HDFC/ICICI/Kotak (0.50%). On a ₹50L loan:
- Processing fee: 0.35% × ₹50L = ₹17,500 + 18% GST = ₹20,650
- Legal vetting: ₹2,000-5,000 (often lower than private bank pricing)
- Technical valuation: ₹2,500-5,000
- CERSAI: ₹50-100
- MODT / equitable mortgage: 0.1-0.5% state-dependent
All-in closing cost: typically ₹35K-75K on a ₹50L PNB loan (versus ₹45K-95K at private banks). Full lifetime-outgo model on our Home Loan Total Cost Calculator.
PNB vs SBI — the PSU showdown
PSU-to-PSU comparison: PNB and SBI are the closest competitors for cost-conscious borrowers.
- PNB advantages: Lower processing fee (0.35% vs SBI’s 0.40-0.50%), 5-bps women concession, simpler documentation for non-metro properties, faster sanction for non-PSU salaried borrowers
- SBI advantages: YONO digital experience (10-sec Insta home loan for eligible customers), 30-year tenure reliably offered, MaxGain OD product (different from Awas), widest branch network, faster disbursal for under-construction
- Tie on: headline rate for Govt/PSU/Defence salaried at CIBIL 760+ — both at 8.50%
Compare like-for-like across SBI · PNB · HDFC · ICICI.
Tax savings under the old regime
Home loan tax benefits for self-occupied property (old regime only):
- Section 24(b): Interest up to ₹2L/FY
- Section 80C: Principal up to ₹1.5L/FY (shared with EPF / PPF / ELSS)
- Section 80EEA: First-time buyers on sub-₹45L properties get ₹1.5L additional interest deduction
On a ₹50L PNB home loan at 8.50% for 20 years: year-1 interest ≈ ₹4.2L (fully uses ₹2L 24b); year-1 principal ≈ ₹0.83L. A 30%-slab taxpayer saves ~₹85K-1L/year in the first decade. See our new vs old regime comparison — home loan deductions are often what tips the choice to the old regime.
PMAY subsidy — the PNB Awas advantage
If you qualify for PMAY-CLSS under PNB Awas, the upfront interest subsidy is real money:
- EWS/LIG (household income ≤ ₹6L): up to ₹2.67L subsidy on ₹6L principal at 6.50% effective for 20 years
- MIG-I (₹6-12L): up to ₹2.35L subsidy on ₹9L principal at 4% concession for 20 years
- MIG-II (₹12-18L): up to ₹2.30L subsidy on ₹12L principal at 3% concession for 20 years
The subsidy is disbursed directly to your loan account as a principal reduction at disbursal. Effective rate under PNB Awas + PMAY can drop as low as 5-6% for eligible EWS/LIG buyers — one of the cheapest home loan rates available in India. Verify eligibility on pmaymis.gov.in before applying.
Common mistakes to avoid
- Not asking for the women concession. If the primary applicant is a woman or the property is jointly owned with a woman, the 5-bps concession is automatic — but only if explicitly documented in the application. Over a 20-year ₹50L loan, that’s ~₹1.2L saved.
- Ignoring PNB Awas if you qualify. Sub-₹35-50L property, first home, eligible income category? The PMAY subsidy alone is worth 2-4% of your loan amount — can’t match that with rate alone.
- Defaulting to 30-year tenure. Maximises eligibility but nearly doubles lifetime interest vs 20 years. Start at 20 and stretch only if FOIR forces it.
- Accepting bundled insurance. PNB may bundle PNB MetLife credit-life insurance into the loan. You pay interest on it for the full tenure. Reject if you already have term insurance.
- Under-estimating sanction turnaround. PSU banks are slower than private on disbursal — budget 7-10 extra days for PNB vs HDFC/ICICI. Don’t agree to builder-deadline penalties based on private-bank timelines.
Bottom line
PNB Home Loan is the right choice when cost matters most: Govt/Defence/PSU employees (8.50% floor matches SBI with lower processing fees), women borrowers (5-bps concession stacks), first-time affordable-housing buyers (PNB Awas + PMAY subsidy combination is hard to beat), and rural / semi-urban property buyers where private banks struggle with underwriting.
For private-sector salaried with pre-approved HDFC/ICICI offers, the private banks often match on rate and win on speed / digital experience. For large-ticket loans > ₹1Cr with complex income profiles, SBI’s branch network + YONO integration often edges out PNB on practical execution.
Model your PNB EMI on the PNB Home Loan EMI Calculator. Full lifetime-outgo on the Home Loan Total Cost Calculator.