Maximum Effective Interest Rate for Home Loans Announced

New maximum interest rate for home loans set at 8.69% per annum for July 2024.

The Federal National Mortgage Association has ended its free market auction system for commitments to purchase conventional home mortgages. As a result, the Commissioner of Financial Institutions has announced that the maximum effective rate of interest per annum for home loans, as established by the General Assembly in 1987 under Public Chapter 291, will be 8.69 percent for the month of July 2024.

This rate is determined by adding four percentage points to the index of market yields of long-term government bonds, which are adjusted to a thirty-year maturity by the U.S. Department of the Treasury. Based on the most recent weekly average statistical data available before this announcement, the calculated rate is 4.69 percent.

Individuals affected by this maximum effective rate of interest are advised to consult legal counsel regarding the impact of the Depository Institutions Deregulation and Monetary Control Act of 1980 (P.L. 96-221 as amended by P.L. 96-399) and the related regulations issued by the Federal Home Loan Bank Board. State usury laws related to certain loans made after March 31, 1980, may be preempted by this Act.

For additional information, please contact:

Alica Owen

Public Information Officer

Tennessee Department of Financial Institutions

(615) 289-4738

Source: Read Original Release

Tennessee Sets New Weekly Interest Rate

The Tennessee Department of Financial Institutions has announced that the state’s maximum effective formula interest rate is set at 12.50 percent per annum, following a calculation based on a 4 percent ceiling above the current weekly average prime loan rate of 8.50 percent by the Federal Reserve. This rate will stay effective until any change in the average prime loan rate is announced by the Federal Reserve.