Commissioner Announces Maximum Effective Interest Rate for Home Loans

The maximum effective interest rate for home loans in Tennessee is 8.38% for May 2024.

The Commissioner of Financial Institutions has announced that the maximum effective interest rate for home loans in Tennessee for May 2024 is 8.38% per annum. This rate is set by the General Assembly and is equal to four percentage points above the index of market yields of long-term government bonds adjusted to a thirty-year maturity by the U.S. Department of the Treasury. The calculated rate based on the most recent weekly average statistical data available is 4.38%.

The Federal National Mortgage Association has discontinued its free market auction system for commitments to purchase conventional home mortgages, prompting this announcement.

Individuals affected by this maximum effective rate should consult legal counsel regarding the effect of the Depository Institutions Deregulation and Monetary Control Act of 1980 and related regulations promulgated by the Federal Home Loan Bank Board, as state usury laws related to certain loans made after March 31, 1980, may be preempted by this Act.

For further information, contact Alica Owen, Public Information Officer at the Tennessee Department of Financial Institutions, at (615) 289-4738.

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Tennessee Announces April 2024 Weekly Formula Interest Rate

Tennessee Department of Financial Institutions Commissioner Greg Gonzales announced a maximum effective formula rate of interest of 12.50 percent per annum for April 2024, based on the Federal Reserve’s weekly average prime loan rate of 8.50 percent.