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Kentucky Mortgage Rates for March 2019

Currently, Kentucky's average 30-year mortgage rate is at 4.63%. 15-year home loans in the Bluegrass State average 4.19%, while 5/1 adjustable-rate mortgages (ARMs) have an initial fixed rate average of 4.40%.

Loan typeAverage rateWeekly change3-month change
30-year fixed4.63%–0.02%–0.27%
15-year fixed4.19%–0.01%–0.26%
5/1 ARM4.40%–0.01%–0.09%
Rates for a $200,000 loan with 20% down payment

Most Kentuckians who look for a mortgage know that interest rates are the easiest way to judge the cost of a loan. However, it's harder to understand the calculations and influences that go into the rates lenders are willing to offer. Because rate offers can change based on lender, borrower, and even timing, we've done some research to provide clarity on the overall state of mortgage rates in the Bluegrass State today.

Best Mortgage Rates in Kentucky

In Kentucky, the lowest 30-year mortgage estimate currently offered is 4.00%. The best 15-year mortgage rate is 3.38%, and the best initial rate for a 5/1 ARM starts at 3.00%. These figures are estimates based on a theoretical home purchase of $200,000 with a 20% down payment.

When mortgage lenders set their interest rates each day, they look at more than just your personal details. They also consider the prevailing direction of real estate and financial markets as well as their own business objectives. Because all these factors play a role in your rate quote, it's hard for the average consumer to nail down exactly how much each one matters.

Given how opaque the underwriting process is, the simplest way to find the best mortgage rate is to take multiple samples. By obtaining quotes from different lenders, you make sure that you're getting a complete picture of the competitive market for home financing. In Kentucky, our estimates above should give you a baseline for what to expect in today's lending environment.

Current Mortgage Rate Forecast for Kentucky

So far in 2019, experts have been surprised by the downward trend in mortgage rates. This may be due to the Federal Open Market Committee's (FOMC) decision to hold off on its planned schedule of increases to the federal funds rate. With fewer rate hikes on the horizon than predicted, consumer interest rates that were climbing in December 2018 have reversed or slowed down.

Line graph of average U.S. 30-year mortgage rates vs. effective federal funds rate since 2014

When we compare the history of the federal funds rate against the average 30-year mortgage rate, we see an imperfect but clear relation between the two numbers. Changes in the effective federal funds rate affect the price that banks must pay to borrow funds, which gets passed on in the rates that banks set on mortgages and other forms of credit.

For Kentucky homebuyers and homeowners, falling rates create a potential opportunity to cut down on the cost of long-term interest. However, locking in a low rate now doesn't necessarily make financial sense if you're otherwise unprepared to handle the major costs of a new mortgage. This can include not only the down payment but also the closing costs and insurance fees that always accompany a home loan.

Rates at Kentucky's Most Popular Mortgage Lenders

Mortgage rates are always influenced by the choices of the biggest lenders. While online lending has grown massively in popularity, traditional banks on the ground continue to play an important role in any market. To get an idea of Kentucky's current rates for home financing, we looked at estimates for a 30-year mortgage from some of the state's largest lenders.

Column graph comparing 30-year mortgage rates at major Kentucky banks

Our survey didn't find too much difference in rate estimates among Kentucky's five biggest banks. Each mortgage lender may have its own underwriting model for determining a mortgage quote, but ultimately they all work from the same set of data to do so. That said, rates change every day, and any unique details in your financial profile may lead lenders to draw very different conclusions about the "right" rate for you.

Comparing Home Loan Rates by City

Kentucky is home to several major metro areas, each of which comprises its own real estate market. Each city has its own median real estate value. We compared the average rate for a 30-year mortgage in each of the state's most populous areas to find out whether the cost of financing is also affected by geography.

AreaAverage mortgage rateMedian home value
Louisville/Jefferson County4.60%$182,430
Lexington-Fayette4.62%$193,315
Evansville4.56%$144,759
Clarksville4.55%$163,375
Average rate is for a 30-year mortgage with a 20% down payment.

As it turns out, mortgage rates are consistent no matter where you're buying a house. In most cases, the type of loan you pick will have a bigger effect on your rate than the address of your property. However, location certainly impacts home prices, which in turn can affect the interest rate available for your financing. Fortunately for Kentuckians, none of the state's metro areas came close to the astronomical real estate prices seen in other regions of the U.S.

The rate estimates above offer a way to measure the quotes you'll be receiving in your search for a mortgage, but they're also dependent on assumptions about loan amount and down payment that may not apply to your situation. If you find that you need a mortgage at lower rates than you seem to be getting in your quotes, it may be worth considering a different type of loan altogether.

Evaluating Your Mortgage Options: An Example in Louisville

Buyers who have a signed purchase agreement don't necessarily have the time to raise their credit score or improve their debt ratios before hunting for mortgage rates. In such cases, it's worth thinking about moving away from the standard 30-year loan. We can see how the numbers play out by considering a hypothetical purchase scenario in Louisville.

Imagine you're buying a $200,000 home near Louisville with a 20% down payment. At the current average for a 30-year mortgage, you would pay at least $821 per month on the principal and interest. Over the full life of the mortgage, the interest will cost you $135,284. Millions of homeowners accept this as the standard scenario, but other options exist.

One alternative is to take an adjustable-rate mortgage (ARM). In Kentucky, the average starting rate for a 5/1 ARM is 4.40%, which will last for five years. The rate can move up or down starting in year six, but homebuyers who plan to sell before then can take advantage of the lower initial ARM rate. Currently, our Louisville house would come at a monthly minimum of $802.

Long-term owners want the opposite: a loan that reduces the lifetime interest cost. A 15-year fixed rate mortgage guarantees lower average rates and half as many payments, at the cost of larger monthly bills. For our example, Kentucky's present average rate for a 15-year mortgage gives us $1,199 in minimum monthly payments but knocks lifetime interest down to $55,783.

Currently, Kentucky's average 30-year mortgage rate is at 4.63%. 15-year home loans in the Bluegrass State average 4.19%, while 5/1 adjustable-rate mortgages (ARMs) have an initial fixed rate average of 4.40%.

Loan typeAverage rateWeekly change3-month change
30-year fixed4.63%–0.02%–0.27%
15-year fixed4.19%–0.01%–0.26%
5/1 ARM4.40%–0.01%–0.09%
Rates for a $200,000 loan with 20% down payment

Most Kentuckians who look for a mortgage know that interest rates are the easiest way to judge the cost of a loan. However, it's harder to understand the calculations and influences that go into the rates lenders are willing to offer. Because rate offers can change based on lender, borrower, and even timing, we've done some research to provide clarity on the overall state of mortgage rates in the Bluegrass State today.

In Kentucky, the lowest 30-year mortgage estimate currently offered is 4.00%. The best 15-year mortgage rate is 3.38%, and the best initial rate for a 5/1 ARM starts at 3.00%. These figures are estimates based on a theoretical home purchase of $200,000 with a 20% down payment.

When mortgage lenders set their interest rates each day, they look at more than just your personal details. They also consider the prevailing direction of real estate and financial markets as well as their own business objectives. Because all these factors play a role in your rate quote, it's hard for the average consumer to nail down exactly how much each one matters.

Given how opaque the underwriting process is, the simplest way to find the best mortgage rate is to take multiple samples. By obtaining quotes from different lenders, you make sure that you're getting a complete picture of the competitive market for home financing. In Kentucky, our estimates above should give you a baseline for what to expect in today's lending environment.

So far in 2019, experts have been surprised by the downward trend in mortgage rates. This may be due to the Federal Open Market Committee's (FOMC) decision to hold off on its planned schedule of increases to the federal funds rate. With fewer rate hikes on the horizon than predicted, consumer interest rates that were climbing in December 2018 have reversed or slowed down.

Line graph of average U.S. 30-year mortgage rates vs. effective federal funds rate since 2014

When we compare the history of the federal funds rate against the average 30-year mortgage rate, we see an imperfect but clear relation between the two numbers. Changes in the effective federal funds rate affect the price that banks must pay to borrow funds, which gets passed on in the rates that banks set on mortgages and other forms of credit.

For Kentucky homebuyers and homeowners, falling rates create a potential opportunity to cut down on the cost of long-term interest. However, locking in a low rate now doesn't necessarily make financial sense if you're otherwise unprepared to handle the major costs of a new mortgage. This can include not only the down payment but also the closing costs and insurance fees that always accompany a home loan.

Mortgage rates are always influenced by the choices of the biggest lenders. While online lending has grown massively in popularity, traditional banks on the ground continue to play an important role in any market. To get an idea of Kentucky's current rates for home financing, we looked at estimates for a 30-year mortgage from some of the state's largest lenders.

Column graph comparing 30-year mortgage rates at major Kentucky banks

Our survey didn't find too much difference in rate estimates among Kentucky's five biggest banks. Each mortgage lender may have its own underwriting model for determining a mortgage quote, but ultimately they all work from the same set of data to do so. That said, rates change every day, and any unique details in your financial profile may lead lenders to draw very different conclusions about the "right" rate for you.

Kentucky is home to several major metro areas, each of which comprises its own real estate market. Each city has its own median real estate value. We compared the average rate for a 30-year mortgage in each of the state's most populous areas to find out whether the cost of financing is also affected by geography.

AreaAverage mortgage rateMedian home value
Louisville/Jefferson County4.60%$182,430
Lexington-Fayette4.62%$193,315
Evansville4.56%$144,759
Clarksville4.55%$163,375
Average rate is for a 30-year mortgage with a 20% down payment.

As it turns out, mortgage rates are consistent no matter where you're buying a house. In most cases, the type of loan you pick will have a bigger effect on your rate than the address of your property. However, location certainly impacts home prices, which in turn can affect the interest rate available for your financing. Fortunately for Kentuckians, none of the state's metro areas came close to the astronomical real estate prices seen in other regions of the U.S.

The rate estimates above offer a way to measure the quotes you'll be receiving in your search for a mortgage, but they're also dependent on assumptions about loan amount and down payment that may not apply to your situation. If you find that you need a mortgage at lower rates than you seem to be getting in your quotes, it may be worth considering a different type of loan altogether.

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Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.