NASHVILLE—The Tennessee Department of Financial Institutions has announced the latest update on the maximum effective formula rate of interest in the state. According to Commissioner Greg Gonzales, the rate is set at 11.50 percent per annum. This rate is calculated based on a ceiling that is 4 percent above the weekly average prime loan rate, which currently stands at 7.50 percent as published by the Federal Reserve on January 6, 2025.
Commissioner Gonzales explained that this rate will remain effective until there is a change in the average prime loan rate as reported by the Federal Reserve Bank. This announcement complies with Chapter 464 of the Public Acts of 1983, the legislation that mandates the weekly announcement of the formula rate of interest by the commissioner of Financial Institutions in Tennessee.
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For further information, interested parties can contact Alica Owen, the Public Information Officer at the Tennessee Department of Financial Institutions, at (615) 289-4738.
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February 2025 Home Loan Interest Rate Announced
The Federal National Mortgage Association has stopped its auction system for purchasing conventional home mortgages, leading Commissioner Gonzales to announce an 8.79% effective interest rate for February 2025. This rate is calculated by adding four percentage points to the market yield of long-term government bonds adjusted for a 30-year maturity. Those affected by the rate should consider legal advice regarding the Depository Institutions Deregulation and Monetary Control Act of 1980, which may override state usury laws for certain loans made after March 1980. For more information, individuals can contact Alica Owen at the Tennessee Department of Financial Institutions.