Idaho Real Estate Practice Exam

What is the statutory usury ceiling on stated interest rates for loans secured by real estate in Idaho?

1. 15%

2. 25%

3. 10%

4. No statutory limit

The correct answer is: No statutory limit

In Idaho, there is no statutory limit on the interest rates that can be charged on loans secured by real estate. This means lenders have the flexibility to set interest rates according to market conditions and the terms agreed upon by both lender and borrower, without a predefined ceiling imposed by state law. This aligns with the broader principle in the U.S. where, apart from certain regulations for specific types of loans (like payday loans or consumer credit), real estate transactions typically do not have interest rate restrictions. The absence of such a limit allows for competitive lending practices, which can vary widely based on risk assessment, creditworthiness of the borrower, and current economic factors. Other options suggest specific ceilings, implying that the state regulates the maximum interest rates for real estate secured loans, which is not the case in Idaho. Therefore, understanding that there is no cap provides important insight into the lending landscape in the state.