Interest Rates in Florida Law
Interest rates in Florida are governed by state usury laws, federal lending regulations, and market conditions. Understanding rate limits, their impact on transactions, and the distinction between rate and APR is essential for real estate and lending matters.
Florida Usury Limits
- Loans ≤ $500,000: Maximum 18% per annum (Section 687.03)
- Loans > $500,000: Maximum 25% per annum
- Criminal usury: >25% on any loan or >45% on loans under $500K (felony)
- Exempt: Licensed financial institutions, mortgage loans, licensed lender business loans
- Penalty: Forfeiture of all interest; borrower may recover double interest paid
Real Estate Impact
- 1% rate increase on $400K mortgage ≈ $10/month higher payment
- Affects purchase affordability and property pricing
- Drives refinancing decisions
- Seller financing must comply with usury limits and IRS AFR
Interest Rate vs. APR
- Interest rate: Cost of borrowing the principal; determines monthly payment
- APR: Total borrowing cost including fees; used for comparison (TILA required)
- APR is always ≥ the interest rate
Related Terms
- Mortgage — Loan structure
- Imputed Interest — IRS minimum rates
- Seller Financing — Private lending terms
Barnes Walker Real Estate Finance
Barnes Walker’s attorneys advise on interest rate compliance and lending matters in Florida real estate transactions. Request a legal inquiry for assistance.
Florida Law Reference
Fla. Stat. Ch. 687
Limits the maximum interest rate that may be charged on loans in Florida. The general usury limit is 18% for loans under $500,000 and 25% for loans of $500,000 or more.
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC