KENTUCKY MORTGAGE REFINANCE RATES TODAY
Current mortgage refinance rates in
Kentucky.
Current mortgage refinance rates in
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Compare mortgage refinance rates in Kentucky.
Key Points
• Mortgage refinance rates are influenced by economic factors such as the bond market and housing-market demand.
• A 1% drop in your mortgage refinance rate could translate to real savings — potentially hundreds of dollars off monthly payments.
• Refinancing to a 15-year mortgage can save significant amounts. Monthly payments may be larger, but less interest is paid overall.
• Homeowners should aim for at least 20% equity in a home before considering a cash-out refinance.
• Closing costs for a mortgage refinance usually fall between 2% and 5% of the loan amount, and should be factored into total costs.
Introduction to Mortgage Refinance Rates
Some people dream of a new home. Others just dream of a new home loan. A mortgage refinance lets the latter group achieve their dream. It’s like a reset button for your mortgage. A refinance gives you the chance to change the terms of your mortgage. Whether you’re looking to lower your monthly payments, pay off your loan faster, or get cash from the equity you have in your home, the type of refinance you choose can affect your financial future. This guide will help you understand how mortgage refinance rates are set and how to obtain the best rate you can. First step? Understanding where mortgage interest rates come from and why they change so much.
💡 Quick Tip: Wondering how to refinance a mortgage? The process, which takes about 30 to 45 days, is similar to when you got your original home loan.
Where Do Mortgage Refi Interest Rates Originate?
The interest rate you’ll be offered if you pursue a mortgage refinance is influenced by various economic forces as well as your personal financial profile. Key economic factors include the performance of the 10-year U.S. Treasury Note. When its rate rises, mortgage interest tends to head in the same direction. Another factor is the housing market. When the market cools, lenders may lower rates to keep attracting customers. Then there is the overall economy: A strong jobs market and economic growth can lead interest rates to rise, while weakness is usually accompanied by lower interest rates. By closely monitoring these factors, you may be able to anticipate changes in rates and make informed decisions regarding the optimal time to refinance your mortgage.
How Interest Rates Affect Home Affordability
Interest rates play a pivotal role in the cost of your mortgage refinance. Your monthly payment hinges on your loan amount, the term of repayment, and the mortgage refinance rate you secure. Here’s a look at how term and rate changes play out for a $300,000 loan:
| Interest Rate | Loan Term | Monthly Payment | Total Interest |
|---|---|---|---|
| 6.00% | 30-year | $1,799 | $347,515 |
| 6.00% | 15-year | $2,532 | $155,683 |
| 7.00% | 30-year | $1,996 | $418,527 |
| 7.00% | 15-year | $2,697 | $185,367 |
Why Refinance in Kentucky?
Refinancing your mortgage can be a savvy financial move if current interest rates are noticeably lower than the rate you have on your existing mortgage. But there are additional reasons that a refi might make sense.
Common Reasons to Refinance a Mortgage
• You qualify for a lower interest rate because your credit score has improved since you purchased your home.
• You want to trim down your repayment term to pay off your loan more quickly and save money on interest, or perhaps you want to extend your repayment term to make monthly payments more manageable.
• You need to tap into your home equity for expenses like college tuition.
• Your adjustable-rate mortgage is about to change, and you want to switch to a fixed-rate loan.
• You have an FHA loan (backed by the Federal Housing Administration) and 20% equity, and you want to eliminate the FHA mortgage insurance premium.
How to Get the Best Available Mortgage Refi Rate
If you have a good reason to refinance, your next step is preparing your finances so that you’ll present to a potential lender in the best possible light. Here are some steps to help you get the best available rate:
• Take good care of your credit score: Timely payments and avoiding new debt can give your score a lift if it isn’t already in sparkling shape.
• Check your equity. If you’re wondering how soon can you refinance a mortgage, the general rule of thumb is that you will need 20% equity. This is especially true for a cash-out refinance (more on that below).
• Reduce your DTI: Aim for a debt-to-income (DTI) ratio of 36% or less to keep your financial house in order. (To determine your DTI ratio, add up your monthly debts and divide by your gross monthly income; multiply by 100.)
• Examine your cash on hand to determine whether you might be able to purchase mortgage points, also known as discount points, to reduce your interest rate.
• Get a handle on your monthly budget so you’ll be able to determine whether a 10- or 15-year mortgage term will work for you. Although it may mean higher monthly payments, a shorter term usually equals less interest paid overall.
Understand Trends in Kentucky Mortgage Interest Rates
As you’re looking at current mortgage rates in Kentucky, it helps to have a sense of context. The chart below shows how closely Kentucky’s rates have stayed to the national average over a span of almost 20 years. (The Federal Housing Finance Agency stopped tracking states after 2018.) It’s important to keep an eye on the market and stay informed about where rates are today and where they may be heading.
Historical U.S. Mortgage Interest Rates
You might have an ideal interest rate in mind, a point at which you’ll feel good about refinancing. But as you’re waiting for an interest rate drop, study the history of rates in the U.S. to make sure your expectations are realistic. Below you can see more than a half-century of rates. Those who remember the rock-bottom rates of early 2021 may be awaiting a drop below 4.00% or 5.00%. But as you can see from the graph below, those rates don’t come around very often.
Historical Interest Rates in Kentucky
As you can see, the average rate rarely varies by more than a point year over year.
| Year | Kentucky Rate | National Rate |
|---|---|---|
| 2000 | 8.09 | 8.14 |
| 2001 | 7.00 | 7.03 |
| 2002 | 6.49 | 6.62 |
| 2003 | 5.68 | 5.83 |
| 2004 | 5.71 | 5.95 |
| 2005 | 5.94 | 6.00 |
| 2006 | 6.62 | 6.60 |
| 2007 | 6.48 | 6.44 |
| 2008 | 6.12 | 6.09 |
| 2009 | 5.09 | 5.06 |
| 2010 | 4.84 | 4.84 |
| 2011 | 4.53 | 4.66 |
| 2012 | 3.67 | 3.74 |
| 2013 | 3.86 | 3.92 |
| 2014 | 4.18 | 4.24 |
| 2015 | 3.85 | 3.91 |
| 2016 | 3.77 | 3.72 |
| 2017 | 4.00 | 4.03 |
| 2018 | 4.65 | 4.57 |
Choose the Right Mortgage Refi Type
As you explore a possible refinance and get acquainted with average rates, it’s important to remember that current mortgage refinance rates in Kentucky vary by the type of mortgage refi you choose. These are some of the most common types:
Conventional Refi
Conventional loans are very popular, and a rate-and-term refinance with a conventional loan may let you lower your interest rate, change your loan term, or both. These loans typically have a higher refinance rate than government-backed loans such as FHA loans. However, they are very flexible. To be eligible for a conventional refinance, you typically need a good credit score and adequate equity in your home.
15-Year Mortgage Refi
As noted above, some borrowers refinance from a 30-year loan into a shorter-term one. Even if you’re able to snag a lower interest rate than you currently have, you may pay more per month than you would with a longer term. But over the life of the loan, you’ll actually significantly trim your interest costs. Some people switch to a 15-year term so they can pay off their mortgage before retirement, and they find higher payments are doable because they are in their peak earning years.
Adjustable-Rate Mortgage Refi
An adjustable-rate mortgage (ARM) starts you out with a lower initial mortgage refinance rate than a fixed-rate loan. But the rate can change over time. If you’re planning to move before the rate adjusts, refinancing from a 30-year fixed mortgage to an ARM can help lower your monthly payment in the short term and save on interest. An ARM could also be a good choice if you’re looking to take advantage of potential interest rate decreases in the future. Just be sure you understand how much your monthly payment could change and how quickly it could increase.
Cash-Out Refi
A cash-out refinance is a way for homeowners to access the equity in their homes by borrowing against it. The rates for these types of refinances are usually a bit higher than the rates for a standard refinance. If your home is worth $500,000 and you owe $300,000, you have $200,000 in equity. A lender may allow you to borrow up to 80% of your equity with a new loan. If you refinance and borrow, say, $100,000, you’ll owe more than you did going into the refi. But it’s a good way to borrow a large sum for a renovation or debt consolidation, and interest rates on home loans are typically lower than those on unsecured loans.
FHA Refi
FHA loans often come with favorable mortgage refinance rates. An FHA Simple Refinance or FHA Streamline Refinance is available to homeowners who currently have an FHA loan. However, even if you don’t have an FHA loan, you can choose an FHA cash-out refinance or an FHA 203(k) refinance. The latter is specifically for home improvement and renovation projects.
VA Refi
VA loans, backed by the U.S. Department of Veterans Affairs, consistently offer some of the most competitive mortgage refinance rates available. In order to qualify for a VA refinance, also known as an Interest Rate Reduction Refinance Loan (IRRRL), you must have an existing VA loan.
Compare Mortgage Refi Interest Rates
Once you’ve zeroed in on the type of refinance you want to undertake, it’s time to research rate offers. Take these steps:
• Shop around and get rates and fees for your refi from multiple lenders.
• As you compare offers, examine the annual percentage rate (APR) of each loan, which includes the interest rate and fees. Make sure you factor in all costs associated with the loan, including discount points.
• Keep in mind that a lower rate might mean higher mortgage refinancing costs elsewhere in the deal. Some lenders offer a no-closing-cost refinance, but the costs tend to be reflected in a higher rate.
• Evaluate the break-even point to decide if the savings are worth the costs. Find the break-even point by dividing the closing costs by the monthly savings from your new payment. Let’s say refinancing causes a payment to decrease by $150 a month. If closing costs are $3,000, it would take 20 months to recoup the costs and start to see savings.
A refinance calculator will be a useful tool during this process.
Use an Online Refinance Calculator
Online refinance calculators are a great way to figure out what your new monthly payment will be and to compare different refinance options. They can help you understand the impact of different mortgage refinance rates and terms, so you can make an informed decision about whether refinancing makes sense for you. By using these tools, you can carefully consider the potential financial implications of refinancing your mortgage, and make a decision that’s right for you and your financial situation.
Run the numbers on your home loan.
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Mortgage calculator
Punch in your home loan amount and a new interest rate, and we’ll estimate your payoff date.
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Enter a few details about your home loan and we’ll provide your monthly mortgage payment.
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Home affordability calculator
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Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
The Takeaway
Refinancing your mortgage can be a smart financial move, but it’s not something you should rush into. By working to improve your credit score and lower your DTI ratio, and by comparing refinance rates in Kentucky from multiple lenders, you can increase your chances of getting a better deal. Whether you’re considering a cash-out refinance, an FHA refinance, a VA refinance, or a 15-year fixed-rate mortgage, the key is to make sure that the refinance makes sense in the context of your broader financial situation and long-term goals.
SoFi can help you save money when you refinance your mortgage. Plus, we make sure the process is as stress-free and transparent as possible. SoFi offers competitive fixed rates on a traditional mortgage refinance or cash-out refinance.
A mortgage refinance could be a game changer for your finances.
FAQ
Are refinance rates going to drop?
There’s no way to predict future mortgage rates, but you can look at key indicators to try to get a sense of where rates might be headed. If the 10-year Treasury Note rate is rising, the housing market is hot, or the economy is generally strong, it’s unlikely that you will see rates falling in the near term. Watch the current refinance rates in Kentucky so you’ll know when the time is right to move forward on a refinance.
When is it a good idea to refinance your home?
Of course it’s a good idea to refinance if you can get a substantially lower interest rate on the new loan. But refinancing your home can also be a smart financial move if it helps you consolidate debt in a cash-out refi, or pay off your mortgage before retirement. One important thing is to figure out at what point the money you spend on refinancing is outweighed by any cash you save in the refinancing process. How long do you plan to stay in the home? If you think you might move before you’ve recouped the cost, a refi may not make sense.
Can I request a rate reduction from my lender?
You can approach your lender and ask for a lower mortgage rate, using the current mortgage refinance rates in Kentucky as a guide. If you have a high credit score and make your payments on time, you’re in a good position to negotiate. But don’t be surprised if your lender says no and suggests a refinance instead.
How much are closing costs on a refinance?
Average closing costs for a refinance usually fall between 2% and 5% of the loan amount. They can fluctuate based on the lender, the type of refinance, and the property’s location and can encompass a variety of fees, including the appraisal and title insurance fee.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article. Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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More refinance resources.
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How Much Does It Cost to Refinance a Mortgage?
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How to Refinance a Home Mortgage Loan
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7 Signs It’s Time for a Mortgage Refinance