Kansas Repeals Recently Updated Mortgage Interest Rate Cap

Mortgage Origination

Recently, Kansas enacted SB 129, which repealed a provision in the mortgage interest rate law that set a floating cap on the interest rate charged for first real estate mortgage loans and contracts for deeds. The repeal also renders irrelevant another recent change to the same provisions. Specifically, on April 4, the state enacted a bill that increased the maximum annual interest rate for certain mortgages from 1.5 percentage points to no more than 3.5 percentage points above a Freddie Mac floating rate. While that change was pending approval by the governor, the legislature passed the repeal, as explained in the legislature’s conference report. With the elimination of the specified interest rate cap, parties now are subject to provisions in current law, which provide the rate cannot exceed 15% per year.