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Kentucky Mortgage and Refinance Rates

On Thursday, March 23, 2023, the national average 30-year fixed mortgage APR is 6.96%. The national average 30-year fixed refinance APR is 6.96%, according to Bankrate's latest survey of the nation's largest mortgage lenders.

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Kentucky mortgage overview

As of Thursday, March 23, 2023, current interest rates in Kentucky are 6.84% for a 30-year fixed mortgage and 6.20% for a 15-year fixed mortgage. Additionally, Kentucky is one of the more affordable states to live as far as home prices go. The state offers first-time homebuyer assistance programs and a tax credit, administered by the Kentucky Housing Corporation (KHC).

First-time homebuyer programs in Kentucky

Below are first-time and repeat homebuyers programs available to residents of Kentucky who qualify. These programs can help ease the upfront costs of purchasing a home by offering down payment, closing cost and mortgage insurance assistance.

KHC Preferred Risk Program

Kentucky Housing Corporation’s Preferred Risk mortgage is a 30-year conventional loan with a 3 percent minimum down payment and no private mortgage insurance (PMI) required. Qualifying homebuyers may be able to combine this program with KHC’s down payment assistance programs. What’s more, there’s no minimum borrower contribution or reserves required.

To be eligible, borrowers need to have a 660 minimum credit score, complete a homebuyer education program, have a maximum loan-to-value ratio (LTV) of 97 percent, and be at least 80 percent below the area median income (AMI), which aries by county.

KHC Preferred Program

Like the Preferred Risk program, KHC’s Preferred mortgage requires 3 percent down, but also mortgage insurance. The eligibility requirements are the same as the Preferred Risk program: a minimum 660 credit score; need to be 80 percent below the AMI; complete a homebuyer education program; and a maximum LTV of 97 percent.

Other features of the loan include no requirements to keep money in reserve or for the borrower to contribute a certain amount towards the purchase, and the ability to pair it with a down payment assistance program.

KHC Preferred Plus 80

KHC’s Preferred Plus 80 mortgage is designed for homebuyers looking for a conventional loan whose income is between 80 and 100 percent of county limits. Like the KHC Preferred program, the Preferred Plus 80 program requires mortgage insurance. Other than the differing income limits, all other requirements are the same as other KHC programs.

Down Payment Assistance Programs (DAP)

KHC’s down payment assistance offerings include two programs:

  • Affordable DAP: This program offers a low-cost, 10-year loan to help cover the down payment and closing costs. The loan can be up to $6,000 and has 1 percent interest, payable over the 10-year term. Borrowers need to meet the county’s income requirements, and the home purchase price is limited to $327,334 as of August 2020.
  • Regular DAP: This program also offers a loan up to $6,000 for the down payment and closing costs, available in $100 increments. Borrowers repay the loan at 5.5 percent interest over a 10-year period. The KHC does not mandate a reserve requirement or liquid asset review, but the purchase price limit for the Affordable DAP also applies.

Kentucky Homebuyer Tax Credit/Mortgage Credit Certificate

Qualifying Kentucky homebuyers may be eligible for a tax credit (mortgage credit certificate, or MCC), which reduces the amount of federal tax owed each year you occupy the home. This tax credit is equal to 25 percent of your annual mortgage interest, up to $2,000. There are also income limits (which vary depending on location and the number of people in your household), and the purchase price cannot be more than $294,600 as of August 2020.

Kentucky mortgage refinancing

There are plenty of options available for mortgage refinancing in Kentucky, including government-backed loans, banks, private lenders and mortgage brokers. It’s a smart move to figure out what your goals are with refinancing, whether it’s to lower the overall amount you pay in interest or to lower your monthly mortgage payments.

Once you understand your goals, shop around and conduct research to see what makes sense for your financial situation. This can help increase your chances of obtaining the best refinance rate and terms.

Kentucky mortgage resources