NASHVILLE—The Tennessee Department of Financial Institutions has announced the new maximum effective formula rate of interest for the state. Commissioner Greg Gonzales stated that the rate is set at 12.00 percent per annum. This rate is determined by adding a ceiling of 4 percent to the weekly average prime loan rate, which was recorded at 8.00 percent according to the Federal Reserve’s publication on November 4, 2024.
The current rate will remain in effect until there is a change in the average prime loan rate as announced by the Federal Reserve Bank. This procedure is in line with Chapter 464, Public Acts of 1983, which mandates that the Tennessee Department of Financial Institutions’ commissioner releases weekly updates on the formula rate of interest.
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For further information, Alica Owen, the Public Information Officer of the Tennessee Department of Financial Institutions, can be contacted at (615) 289-4738.
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New Maximum Interest Rate for Home Loans
The Federal National Mortgage Association has ceased its free market auction system, prompting a new maximum home loan interest rate of 8.52% for December 2024, as announced by Commissioner Gonzales, based on the 1987 Public Chapter 291 legislation. This rate is calculated as four percentage points above the market yield index on long-term government bonds, adjusted to a 30-year maturity. Affected individuals are encouraged to seek legal advice to understand the implications of related federal acts and regulations. Further information can be obtained from Alica Owen at the Tennessee Department of Financial Institutions.