Tennessee passed a bill revising the index used to calculate the maximum permissible interest rate for home loans. Currently, the maximum interest rate for a home loan is an amount equal to 4 percentage points above the index of market yields of long term government bonds adjusted to a 30 year maturity by the Department of Treasury, or 18%, whichever is less. Under the bill, the “index of market yields of long term government bonds adjusted to a 30 year maturity by the Department of Treasury” is replaced with the “average prime offer rate that applies to a 30-year fixed loan (as published by the federal financial institutions examination council)”. The bill becomes effective July 1, 2025.
Click to view the TN House Bill 908: https://www.tenaco.com/wp-content/uploads/2025/05/TN-HB-908-04-26-25.pdf
