Effective rate is based on a ceiling of 4% over the weekly average prime loan rate
Nashville – Tennessee Department of Financial Institutions Commissioner Greg Gonzales announced the maximum effective formula rate of interest in Tennessee is 12% per annum and the maximum effective rate of interest per annum for home loans for the month of May is 7.75% per annum.
The effective rate is based on a ceiling of 4% over the weekly average prime loan rate of 8% as published by the Federal Reserve on April 3.
Commissioner Gonzales said the rate remains in effect until the average prime loan rate as announced by the Federal Reserve Bank changes. The effective interest rate is an amount equal to four percentage points above the index of market yields of long-term government bonds adjusted to a 30 year maturity by the U. S. Department of the Treasury. For the most recent weekly average statistical data available preceding the date of this announcement, the calculated rate is 3.75 percent.