Kentucky Mortgage and Refinance Rates

Current mortgage rates in Kentucky

As of Thursday, November 21, 2024, current interest rates in Kentucky are 7.04% for a 30-year fixed mortgage and 6.35% for a 15-year fixed mortgage. 

Residential prices in The Bluegrass State are modest: The median home cost $243,750, as of January 2024, well below the national median of $344,157, according to ATTOM. Still, that figure represents a 10% increase year-over-year. And the fact that sales have fallen 24% in the same period suggests that affordability is a challenge for Kentucky residents, as for aspiring homeowners around the country.

Refinance rates in Kentucky

While mortgage refinance rates have more than doubled since the pandemic, many Kentucky homeowners have much more tappable equity now: the average mortgage-holder has gained $15,000 since 2023, according to CoreLogic. With a cash-out mortgage refinance, you could take advantage of this asset to help further your financial goals.

Kentucky mortgage rate trends

While mortgage rates are difficult to predict, the current consensus is for rates to remain well above historical lows for the foreseeable future, including in Kentucky.

National mortgage rates by loan type

Mortgage statistics for Kentucky

• Most popular cities: Louisville, Lexington, Evansville, Bowling Green, Owensboro
• Most affordable counties (based on median home value): Fulton, Estill, Perry, Caldwell, Pike
• Median home sales price, Jan. 2024: $243,250
• Median down payment, Jan. 2024: $28,700
• Homeownership rate, Q4 2023: 72.3%

Sources: ATTOM, 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.
• Kentucky USDA loans: If buying in a rural area, 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 as the Preferred program, but with 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.

How to find the best mortgage rate in Kentucky for you

• Step 1: Strengthen your credit score - Long before you start looking for a mortgage lender or applying for a loan, give your finances a checkup, and improve your credit score if needed.
• Step 2: Determine your budget - To find the right mortgage, you’ll need a good handle on how much house you can afford.
• Step 3: Know your mortgage options - There are a few different types of mortgages.
• Step 4: Compare rates and terms from several lenders - Rate-shop with at least three different banks or mortgage companies.
• Step 5: Get preapproved for a mortgage - Getting a mortgage preapproval is the only way to get accurate loan pricing for your specific situation.

Additional Kentucky mortgage resources

• 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: Troy Segal, Senior Editor, Home Lending

I’ve been writing and editing stories in the personal finance sphere for two decades, for publications like Business Week and Investopedia, covering everything from entrepreneurs to taxes. Since coming to Bankrate, I’ve concentrated on real estate, mortgages, renovations and other financial aspects of homeownership — helping people understand how a home isn’t just a place to live, but an investment that’s important to building and bequeathing wealth. 

Read more from Troy Segal