A loan is considered high-cost if the transaction’s annual percentage rate (APR) exceeds the Average Prime Offer Rate (APOR) for comparable transactions on that date by more than 6.5 percentage points for a first-lien dwelling secured transaction, unless the dwelling is personal property and the loan amount is less than $50,000. In such a case, the APR must exceed the APOR by 8.5 percentage points. The Federal Financial Institutions Examination Council (FFIEC) publishes the updated APOR for both fixed and variable rate loans each week on its website at https://www.ffiec.gov/ratespread/aportables.htm.

In addition, the adjusted total loan amount threshold for high-cost mortgages in 2017 will be $20,579, and the adjusted points and fees dollar trigger for high-cost mortgages will be $1,029. In other words, when the total loan amount for a transaction is $20,579 or more, the transaction is a high-cost mortgage if the points and fees exceed 5% of the total loan amount. When the total loan amount for a transaction is less than $20,579, the transaction is a high-cost mortgage if the points and fees exceed the lesser of $1,029 or 8% of the total loan amount.

For resources related to our guidance, please see:

• Regulation Z, 12 CFR 1026.32(a)(i) (A high-cost mortgage is “any consumer credit transaction that is secured by the consumer's principal dwelling . . . in which . . . [t]he annual percentage rate applicable to the transaction . . . will exceed the average prime offer rate . . . for a comparable transaction by more than 6.5 percentage points for a first-lien transaction . . . 8.5 percentage points for a first-lien transaction if the dwelling is personal property and the loan amount is less than $50,000 . . .”)

• FFIEC website: https://www.ffiec.gov/ratespread/aportables.htm

• CFPB Final Rule, 81 FR 41418, 41420 (June 26, 2016) (“Effective January 1, 2017, for purposes of determining under § 1026.32(a)(1)(ii) the points and fees coverage test under HOEPA to which a transaction is subject, the total loan amount threshold is $20,579, and the adjusted points and fees dollar trigger under § 1026.32(a)(1)(ii)(B) is $1,029. When the total loan amount for a transaction is $20,579 or more, and the points and fees amount exceeds 5 percent of the total loan amount, the transaction is a high-cost mortgage. When the total loan amount for a transaction is less than $20,579, and the points and fees amount exceeds the lesser of the adjusted points and fees dollar trigger of $1,029 or 8 percent of the total loan amount, the transaction is a high-cost mortgage.”)