WeVote
Log In

Bill

Bill

HB 2497

Prohibiting the assessment of a prepayment penalty against any party more than six months after the execution of a note evidencing a home loan made primarily for personal, family or household purposes secured by a real estate mortgage.

2025-2026 Regular Session

Kansas bill caps residential mortgage prepayment penalties to six months post-loan execution, allowing early payoff without long-term financial penalties.

Engrossed on Tuesday, March 31, 2026
#financialinstitutions
0
WeVote Research Nonpartisan
Bill Summary · HB 2497

Legislative bill overview

HB 2497 limits the timeframe during which lenders can assess prepayment penalties on residential home loans in Kansas. Under this bill, lenders would be prohibited from charging prepayment penalties more than six months after a homeowner signs the mortgage note. This applies only to loans primarily for personal, family, or household purposes secured by real estate mortgages.

Why is this important

Prepayment penalties can discourage homeowners from refinancing to better loan terms or paying off their mortgages early, potentially costing borrowers thousands of dollars over time. By capping the penalty period at six months, this bill aims to protect consumers from long-term financial restrictions while still allowing lenders a reasonable enforcement window. This affects both homeowners seeking loan flexibility and the mortgage lending industry's penalty structures.

Potential points of contention

  • Lender revenue impact: Financial institutions may argue that six months is insufficient to recoup origination costs, particularly on loans that are refinanced quickly, potentially leading to higher initial interest rates to offset lost penalty revenue
  • Definition ambiguity: The phrase "primarily for personal, family or household purposes" could create disputes over borderline cases (e.g., investment properties, business-use portions of properties), leading to litigation and enforcement challenges
  • Market competitiveness: Some lenders may respond by tightening lending standards or increasing rates for borrowers perceived as higher refinance risks, potentially making mortgages less accessible for certain populations

Compiled from official sources — confirm details with the bill’s official record.

Sign in to ask a question.