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Compare mortgage rates in Kansas.
Key Points
• The cost of living in Kansas is 17% lower than the national average, but current mortgage rates run near U.S. rates.
• Mortgage interest rates are influenced by economic factors like inflation, unemployment rates, and the Federal Reserve’s monetary policy, as well as consumer factors like credit scores, down payments, and loan-to-value ratios.
• Kansas offers various mortgage types to fit different homebuyers, including fixed-rate, adjustable-rate (ARMs), FHA, VA, USDA, and jumbo loans.
• Mortgage rates in Kansas follow seasonal trends, with higher rates in spring and summer and lower rates in fall and winter.
• Homebuyers in Kansas should shop around with multiple lenders and compare their interest rates and fees to secure a competitive mortgage rate.
Introduction to Mortgage Rates
Mortgage interest rates are calculated using a complex combination of factors, broadly categorized into the state of the economy and the borrower’s financial status. These factors impact the cost of borrowing money to purchase a home.
Lenders consider several Big Picture metrics when determining mortgage interest rates, including the current federal funds rate set by the Federal Reserve, inflation, and the unemployment rate.
Individual factors like credit score, down payment, income, assets, and loan type also play a significant role. Keep reading to learn more about how mortgage rates are set and what homebuyers can do to ensure they secure the best available rates.
Where Do Mortgage Rates Come From?
The Federal Reserve, also known as the Fed, sets the short-term interest rates that banks use as a benchmark. Although home loan rates are not directly tied to Fed rates, they generally follow similar economic trends.
When the Fed raises interest rates, it becomes more expensive for banks to borrow money, leading to higher mortgage rates for consumers.
How Interest Rates Affect Home Affordability
Mortgage rates have a significant impact on home affordability, which is often overlooked by homebuyers. Even small changes in interest rates can significantly affect the monthly mortgage payments and the overall cost of homeownership.
Let’s say you put in a offer for $228,000, the average home value in Kansas. Assuming a 20% down payment of $45,600, you’ll need a mortgage for $182,400. With a 30-year, fixed-rate conventional mortgage and a 6.50% interest rate, your monthly payment will be $1,152. But hike up the rate by just 1% to 7.50%, and your monthly payment rises to $1,275 — a difference of $123 a month and $1,476 per year.
While that may be manageable for some homebuyers, consider that the extra percentage point means you’ll pay more than $44,000 in additional interest over the life of the loan. Rising interest rates can price middle-income families out of the housing market, limiting their ability to purchase a home — or accomplish other financial goals
Should Homebuyers Wait for Interest Rates to Drop?
Many first-time homebuyers face the dilemma of whether to buy now or wait for interest rates to decrease. While timing the market is challenging even for the experts, there are other factors to consider as well.
As you’re waiting for lower rates, home prices could rise abruptly, housing inventory could drop significantly, or your hidden gem of a neighborhood could be discovered by a flood of competing homebuyers. Any of those things could cancel out your interest-rate savings.
If you’re determined to secure the absolute rock-bottom mortgage rate, remember that you can always turn to a mortgage refinance. Refinancing allows homeowners to secure a lower interest rate in the future, saving them money over the long term.
Kansas Mortgage Rate Trends
Understanding historical mortgage rate trends can provide valuable insights into where rates are headed. Over a 20-year period, mortgage rates in Kansas ranged from almost 8.00% in 2000 to around 3.50% in 2012. Despite recent increases, current mortgage rates are still lower compared to historical highs. (The Federal Housing Finance Authority stopped keeping records after 2018.)
| Year | Utah Rate | U.S. Rate |
|---|---|---|
| 2000 | 7.90 | 8.14 |
| 2001 | 6.94 | 7.03 |
| 2002 | 6.54 | 6.62 |
| 2003 | 5.69 | 5.83 |
| 2004 | 5.72 | 5.95 |
| 2005 | 5.78 | 6.00 |
| 2006 | 6.27 | 6.60 |
| 2007 | 6.14 | 6.44 |
| 2008 | 5.83 | 6.09 |
| 2009 | 5.03 | 5.06 |
| 2010 | 4.77 | 4.84 |
| 2011 | 4.28 | 4.66 |
| 2012 | 3.58 | 3.74 |
| 2013 | 3.78 | 3.92 |
| 2014 | 4.11 | 4.24 |
| 2015 | 3.77 | 3.91 |
| 2016 | 3.68 | 3.72 |
| 2017 | 4.02 | 4.03 |
| 2018 | 4.68 | 4.57 |
Historical U.S. Mortgage Rates
To provide a broader context, here’s a brief overview of historical U.S. mortgage rates. Back in the early 1980s, interest rates peaked at an astounding 18.00%. They remained high throughout the decade, averaging around 12.00%. Since then, they’ve dropped significantly, hovering around 4.00% in the 2000s and 2010s.
Post-COVID, rates have climbed a bit again but remain well below historical highs. This should reassure house hunters who are wondering if today’s mortgage rates are “normal.”
Factors Affecting Mortgage Rates in Kansas
Numerous factors influence mortgage rates in Kansas and nationwide, from economic conditions to borrower-specific characteristics. Understanding the interplay of economic and consumer factors can be a big help when you’re navigating the mortgage landscape.
While some factors, like the federal funds rate, are beyond an individual’s control, others, such as credit score and down payment, can be influenced by the homebuyer.
Economic Factors
Economic factors that impact mortgage rates include the federal funds rate, inflation, and unemployment rate.
• The Fed: Changes in the federal funds rate directly affect mortgage rates, making it an important economic indicator for homebuyers.
• Inflation: Inflation erodes the value of money, prompting lenders to raise interest rates to maintain their profit margins.
• Unemployment rate: A robust economy with low unemployment can lead to higher mortgage rates due to increased demand for housing.
Consumer Factors
Consumer factors that influence mortgage rates include credit score, down payment, income and assets, and type of mortgage loan. This means you, the homebuyer, have the power to influence the interest rates you’re offered.
• Credit score: A strong credit score demonstrates responsible financial behavior, making borrowers more attractive to lenders and leading to lower interest rates.
• Down payment: A larger down payment reduces the loan amount, lowering the risk for lenders and potentially securing a lower interest rate.
• Income and assets: Financial stability, as evidenced by a steady income and substantial assets, enhances a borrower’s creditworthiness and can lead to more favorable interest rates.
• Type of mortgage loan: Different types of mortgage loans carry different interest rates, with adjustable-rate mortgages and government-backed loans often offering lower rates. Additionally, shorter loan terms generally have lower rates compared to longer terms.
Types of Mortgages Available in Kansas
Kansas offers various mortgage types to cater to different homebuyers’ needs, including fixed-rate, adjustable-rate, FHA, VA, and USDA loans.
Exploring the diverse mortgage options available in Kansas allows homebuyers to choose the loan that best aligns with their financial situation and homeownership goals.
If you’re buying your first home, you’re probably most familiar with conventional mortgage loans. These provide flexibility in terms of interest rates and loan amounts, making them suitable for a wide range of borrowers.
Fixed-Rate Mortgage
Fixed-rate mortgages provide stability and predictability by maintaining the same interest rate throughout the life of the loan. The consistent interest rate of fixed-rate mortgages offers peace of mind and allows for accurate budgeting.
Fixed-rate mortgages come with varying loan terms, typically ranging from 10 to 30 years, allowing borrowers to choose a repayment period that suits their financial circumstances.
Adjustable-Rate Mortgage (ARM)
Adjustable-rate mortgages (ARMs) offer lower initial interest rates compared to fixed-rate loans, but these rates can fluctuate over time. ARMs are an attractive option for those planning to sell or refinance before the fixed-rate period ends.
An ARM rate may be fixed for three, five, seven, or 10 years and then periodically adjust. If you see a 7/6 or 10/6 ARM, that means the rate on the home loan can adjust every six months after the introductory period.
FHA Loan
Backed by the Federal Housing Administration, FHA loans are designed for borrowers with less-than-perfect credit or limited down payment capabilities. FHA loans offer more accessible eligibility criteria, making homeownership possible for individuals who may not qualify for conventional loans.
FHA loans do require an upfront mortgage insurance premium (MIP) of 1.75% of the base loan amount, as well as monthly MIP for new homebuyers — most often 0.55%.
VA Loans
VA loans are exclusively available to veterans, active-duty military members, and certain Reserve and National Guard members. A significant advantage of VA loans is the elimination of the down payment requirement, making homeownership more attainable for eligible military personnel. If you’re interested in a VA loan, your first step is to obtain a certificate of eligibility from the VA.
USDA Loans
USDA loans are tailored to low-income borrowers seeking to purchase homes in rural areas. The backing of the U.S. Department of Agriculture ensures the availability of USDA loans to eligible borrowers in rural areas. One perk of these mortgages is that private mortgage insurance (PMI) is not required. You can find eligible rural areas in Kansas by entering the town name or zip code in the USDA mapping tool .
Jumbo Loans
Jumbo loans cater to borrowers seeking financing for homes exceeding the conventional loan limit. Throughout Kansas, the upper limit for a conventional loan is $766,550 for a single-family home. Any mortgage amount above that requires a jumbo loan.
Popular Places to Get a Mortgage in Kansas
Securing a mortgage often depends on choosing the right location, where home prices are affordable and the cost of living is within your budget.
Being strategic in your location selection can enhance your chances of achieving successful homeownership in Kansas.
Least Expensive Locations
While the overall cost of living statewide is almost 17% lower than the national average, it varies across different Kansas cities and towns. The Cost of Living Index (COLI) provides a comparison of the cost of living in different locations relative to the average cost of living in the U.S. Values above 100 indicate more expensive areas, while values below 100 point to more affordable locations.
Based on SoFi’s guide to the Best Affordable Places in the U.S., some less expensive locations in Kansas include:
• Hays COLI 80.4. More than 40% of residents have attained a college degree, and major employers in the area offer jobs across health care, education, government, retail and manufacturing.
• Pittsburg COLI 69.1. About two hours south of Kansas City, you’ll find this mining town with a charming downtown and plenty of good eats.
• Salina COLI 75.8. Close to the heart of Kansas, the city is known for an abundance of manufacturing jobs and family-friendly attractions such as the Smoky Hill Museum and the Kenwood Cove Aquatic Park.
• Topeka COLI 80. The capital city enables residents to live on a budget while accessing top-notch dining, entertainment, outdoor recreation, and basic goods and services.
• Wellington COLI 76.5. This small town south of Wichita offers great job opportunities and multiple museums and parks.
Most Expensive Locations
Although Kansas is known for its affordable cost of living, the state has its affluent pockets with higher priced homes. Mission Hills (COLI 106.2) in Johnson County is reportedly the most expensive neighborhood in Kansas, with an average home price of about $2 million. Also in Johnson County, Fairway (106.2) is a quaint, suburban town that’s close to award-winning restaurants, country clubs, and excellent schools.
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Tips for Securing a Competitive Mortgage Rate in Kansas
As we’ve shown above, obtaining a competitive mortgage rate is necessary for saving money over the life of a loan. Even a slight difference in interest rate can result in significant savings or added costs over time. Here are some ways to ensure you’re getting the best available rate.
Compare Interest Rates and Fees
Comparing interest rates and fees from multiple lenders is essential for securing the most favorable mortgage terms. Shopping around for mortgage rates is highly recommended, allowing homebuyers to identify the most competitive offers and avoid unnecessary expenses.
When researching mortgages, make sure to compare not just APRs but also associated costs, including upfront fees and closing charges, which vary by lender.
Obtain Preapproval
Getting a preapproval for a mortgage strengthens a homebuyer’s position and facilitates a smoother home-buying process.
The mortgage preapproval process involves submitting financial documents and undergoing a credit check to assess your eligibility for a mortgage. A letter of preapproval from a lender demonstrates a borrower’s creditworthiness and financial readiness, enhancing their appeal to sellers and expediting the home-buying process.
In an environment of rising interest rates, locking in an interest rate during the preapproval process can provide peace of mind and protection against potential rate increases during the home search process.
Kansas Mortgage Resources
Although the Kansas housing market is relatively affordable, inventory in some areas is low and competition can be fierce. Fortunately, Kansas offers various resources and programs to assist homebuyers, particularly first-time buyers and those with limited financial resources.
Down Payment Assistance
There are multiple statewide down payment assistance programs for first-time and repeat homebuyers in Kansas. Participants must meet certain income limits and other financial requirements.
The Kansas Housing Resources Corporation First-Time Homebuyer Program offers a no-payment second mortgage to help cover their down payment and closing costs. The loan is forgiven after 10 years if it remains the buyer’s primary residence.
FHLBank Topeka runs the Homeownership Set-Aside Program to assist low- and moderate-income with their down payment, closing costs, and even repair costs. The five-year forgiveable grant of $2,500 to $15,000 must be repaid only if the homebuyer sells the home or refinances within five years.
Tools & Calculators
Various online tools and calculators are available to help homebuyers estimate their monthly mortgage payments, determine affordability, and compare different loan options. These tools can assist borrowers in making informed decisions about their mortgage.
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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Down payment calculator
Enter a few details about your home loan and we’ll provide your monthly mortgage payment.
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Home affordability calculator
Provide us with a few details and see how much you can afford to spend on a home purchase.
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.
Refinancing Options in Kansas
Homeowners in Kansas have refinancing options to potentially secure lower interest rates and optimize their mortgage terms.
With a conventional refinance, the existing mortgage is replaced with a new one, ideally with different terms and a lower interest rate. Similarly, a cash-out refi allows homeowners to take out a new mortgage for a larger amount than what they have left on their current mortgage and receive the excess amount as cash. As with your first mortgage, it pays to shop around with multiple lenders for the best deals.
FHA loan holders may obtain lower interest rates without extensive documentation requirements with an FHA Streamline Refinance. And VA Interest-Rate Reduction Refinance Loans (IRRRL) provide VA loan holders with an opportunity to lower their monthly payments by securing a reduced interest rate.
Closing Costs and Fees in Kansas
Closing costs associated with home purchases in Kansas typically range between 2% and 5% of the home’s purchase price. Understanding closing costs is essential for budgeting and financial planning during the homebuying process. The specific closing costs for a property can vary depending on its value and location within Kansas. Talk to your lender to request an estimate of your closing costs.
The Takeaway
Kansas’s housing landscape offers a range of options for homebuyers, encompassing various affordable neighborhoods, loan types, assistance programs, and refinancing opportunities. Empowered with knowledge and planning, homebuyers can navigate the Kansas mortgage market with confidence and secure a mortgage that supports their homeownership aspirations.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
FAQ
Will mortgage rates drop in Kansas?
Predicting future mortgage rate movements is challenging due to the influence of various factors, including the borrower’s financial profile. However, it may be comforting to know that current mortgage rates are on par with the historical average.
Will mortgage rates ever go back to normal?
The definition of “normal” mortgage rates varies over time. Current mortgage rates are higher than they were mid-pandemic; however, they’re in line with the 50-year historical average. In other words, they’re normal.
Will Kansas home prices ever drop?
Kansas housing prices are already pretty affordable compared to the national average. Beyond that, home prices are influenced by a number of local factors, which means they’re not consistent across the state. Your best bet is to consult with real estate professionals who specialize in the area(s) you’re interested in to gain insights into pricing trends.
Is it a good time to buy a house in Kansas?
Determining the ideal time to purchase a home involves considering personal financial circumstances, market conditions, and long-term goals. There’s no one-size-fits-all answer, and seeking advice from financial experts and real estate professionals can provide valuable guidance.
How to lock in a mortgage rate?
Locking in a mortgage rate involves working with a lender to secure a specific interest rate for a certain period, typically ranging from 30 to 90 days. This process ensures that the agreed-upon rate will be honored when the loan closes, protecting against potential rate increases.
How do mortgage interest rates work?
Mortgage interest rates are determined by various factors, including the current federal funds rate set by the Federal Reserve, inflation, the unemployment rate, the borrower’s credit score, down payment, loan amount, and loan term. Lenders assess these factors to determine the level of risk associated with a loan and set the corresponding interest rate.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.
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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.
†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.
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.
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article. 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.External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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More home loan resources.
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First-Time Homebuyer Guide
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First-Time Homebuyer Programs and Loans
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Mortgage Preapproval Process