Kentucky Mortgage and Refinance Rates

Current mortgage rates in Kentucky

As of Thursday, January 30, 2025, current interest rates in Kentucky are 6.90% for a 30-year fixed mortgage and 6.40% for a 15-year fixed mortgage. 

Refinance rates in Kentucky

While mortgage refinance rates have more than doubled since the pandemic, many Kentucky homeowners have much more tappable equity now. Kentucky homeowners have gained an average rise in equity of $8,000 between the fall of 2023 and 2024, according to CoreLogic. 

Kentucky mortgage rate trends

While mortgage rates are hard to predict, many experts believe rates will stay between 6 and 7 percent for much of 2025 — in Kentucky and nationwide. While borrowing costs remain higher than most buyers would like, the cost of a home in the state is less than most areas in the U.S. Despite a 7.3 percent year-over-year increase, the median home sales price in Kentucky was $261,300 as of December 2024, according to Redfin data.

National mortgage rates by loan type

Mortgage statistics for Kentucky

Whether it's the big-city buzz of Louisville, the college-town charm of Lexington or the rural beauty of horse country — no matter where you look in Kentucky, there are plenty of reasons to plant permanent roots. As you compare different places to live, consider these helpful statistics about the state’s housing market:

• Median home sales price (Dec. 2024): $261,300
• Median days on market (Dec. 2024): 48
• Median down payment (Oct. 2024): $33,000
• Homeownership rate (Q3 2024): 69.9%

Sources: ATTOM, Redfin, U.S. Census Bureau

Mortgage options in Kentucky

• Kentucky conventional mortgages: For a conventional mortgage in Kentucky, you’ll need a minimum credit score of 620 and a debt-to-income (DTI) ratio no greater than 45 percent. If your down payment is less than 20 percent, you’ll also need to pay premiums for private mortgage insurance (PMI).
• Kentucky FHA loans: If your credit history makes you ineligible for a conventional mortgage, you could apply for a loan insured by the Federal Housing Administration (FHA). With a down payment of at least 3.5 percent, you could be eligible with a credit score as low as 580. (You could even qualify with a credit score as low as 500, but you’ll need to put at least 10 percent down.)
• Kentucky VA loans: If you’re a veteran or active-duty member of the military, you might be eligible for a mortgage guaranteed by the Department of Veterans Affairs (VA). VA loans do not necessitate a down payment or mortgage insurance, but you will be responsible for paying a funding fee ranging from 1.25 percent to 2.15 percent for the first use.
• Kentucky USDA loans: If you're buying in a rural area in Kentucky, you could be eligible for a mortgage guaranteed by the U.S. Department of Agriculture (USDA). These loans don’t require a down payment, but you must buy in a designated rural area and meet area-specific income limits.

First-time homebuyer programs in Kentucky

The homebuyer programs below are available through the Kentucky Housing Corporation, the state’s housing finance authority. These programs can help make buying a home more affordable. Here’s an overview:

• KHC Conventional Preferred Program: A conventional loan program for first-time and repeat homebuyers, the Preferred program requires 3 percent down, monthly mortgage insurance, a minimum 660 credit score and household income below 80 percent of the area’s median income (AMI). There’s no cash reserve requirement, and you could pair the loan with a down payment assistance program.
• KHC Preferred Plus 80: The Preferred Plus 80 program has similar requirements to the Preferred program but higher income limits.
• KHC Regular Down Payment Assistance Program (DAP): This loan offers up to $10,000 for a down payment. It comes with a 10-year term and a fixed rate of 3.75 percent.
• KHC’s Home Buyer Tax Credit: First-time homebuyers might be eligible for a tax credit that provides a dollar-for-dollar reduction in federal taxes worth 20 percent of the mortgage interest you pay, up to $2,000 per year.

Additional Kentucky mortgage resources

• Kentucky mortgage lenders: Read reviews of licensed lenders in the Bluegrass state.
• Kentucky first-time homebuyer resources: Get more help becoming a homeowner.
• Kentucky loan limits by county: Learn the conforming loan limit for your city or town.
• Homeowners insurance in Kentucky: Compare policies from a variety of providers.

Meet our Bankrate experts

Written by: Andrew Dehan, Writer, Home Lending

I’ve covered mortgages, real estate and personal finance since 2020. At Bankrate, I’m focused on all of the factors that affect mortgage rates and home equity. I enjoy distilling data and expert advice into takeaways borrowers can use. Prior to Bankrate, I wrote and edited for Rocket Mortgage/Quicken Loans. My work has been published by Business Insider, Forbes Advisor, SmartAsset, Crain’s Business and more.

Read more from Andrew Dehan

Edited by: Laurie Richards, Editor, Home Lending

I’ve spent five years in writing and editing roles, and I now focus on mortgage, mortgage relief, homebuying and mortgage refinancing topics. I’m most interested in providing resources for aspiring first-time homeowners to help demystify the homebuying process. In 2021, I earned a Poynter ACES Certificate in Editing. I have an MA in English. 

Read more from Laurie Richards