We often hear that you should put 20% down when purchasing a home. That means the down payment for a $250,000 house would be $50,000. But not everyone has that much cash lying around.
Luckily, nowadays you can get a conventional mortgage by putting significantly less money down. In fact, some first-time homebuyers can buy a house with as little as 3% down. For a $250,000 home, that’s only a $7,500 down payment. And if you qualify for a VA loan (backed by the U.S. Department of Veterans Affairs), you may be able to purchase a $250,000 house with 0% down. Even better: Anyone who hasn’t owned a primary residence in the last three years is usually considered a first-time buyer.
Below, we’ll explore how to calculate the down payment on a $250,000 house, plus what you should budget for monthly mortgage payments and how to get approved for the mortgage.
Key Points
• First-time homebuyers may be able to purchase a $250,000 home with a down payment as low as 3% (that’s $7,500).
• VA loans offer eligible buyers the option to purchase with 0% down.
• Monthly mortgage payments vary based on down payment, interest rate, and loan term.
• An annual income of around $76,000 is recommended to afford a $250,000 home.
• Mortgage preapproval helps determine affordability and strengthens offers in a competitive market.
How Much Income Do I Need to Afford a $250K Home?
On average, you’ll need to earn about $76,000 before taxes to afford a $250,000 home, but this can vary significantly. Why? How much income you need for a $250K house depends on several factors, including your other debts, your credit score, the length of the home loan, property taxes, homeowners insurance costs, and other fees:
• Other debts: Lenders don’t look purely at your income when deciding to approve you for a mortgage; rather, they look at your income in relation to your debts. Typically, you need a debt-to-income ratio of 36% or less to qualify for a mortgage, but this can vary by lender. If you have significant debts (credit cards, student loans, auto loans, etc.), you’ll need to make more money to ensure you meet a lender’s DTI requirements.
• Your credit score: Your credit score impacts your interest rate. A lower credit score means a higher interest rate — and a higher monthly payment to budget for.
• The length of the loan: A 30-year loan term means your mortgage is spread out over 360 payments, which makes them smaller and more manageable on a lower income. However, if you get a 15-year mortgage, your monthly payments will be considerably larger, meaning you’ll need a higher income to afford them.
• Property taxes: In addition to paying back your loan, you’ll also have to pay property taxes every year. Make sure you factor in these taxes when calculating how much money you need to make to afford a $250,000 home.
• Homeowners insurance costs: You aren’t just budgeting for the cost of the house. You also need to think about the cost of living in general. You’ll need to leave room in your budget for the homeowners insurance you’ll have to carry, for example. The cost of homeowners insurance depends on factors such as where you live and the size of your home.
• Other fees: Some lenders roll certain loan fees (such as appraisal fees and closing costs) into the mortgage. If you opt for a lender that does so, it can increase your monthly loan payment.
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How Much Is the Down Payment for a $250K Home?
The down payment on a $250,000 home depends on the type of mortgage loan you get. Traditionally, experts recommend putting 20% down ($50,000 for a $250,000 home); this is ideal for a conventional mortgage, as putting 20% down means you don’t need to pay for private mortgage insurance (PMI).
However, not everyone can afford to put 20% down. Here’s a look at various mortgage types and the minimum down payment on a $250,000 home for those who qualify as a first-time homebuyer:
• Conventional mortgage: As low as 3% to 5% ($7,500 to $12,500)
• FHA (Federal Housing Administration) loan: As low as 3.5% ($8,750) for buyers who meet credit score requirements
• VA loan: As low as 0% for qualifying borrowers and homes
What Are the Down Payment Options for a Home Worth $250K?
The down payment options for a $250,000 home are varied, from as little as 0% down through a VA loan to as much as 100% (i.e., paying cash for the house). Which option you choose depends on how much you have saved up and the type of home loan you’re applying for.
Here are a few things to keep in mind:
• FHA loans: You can qualify for a government-backed FHA loan with as little as 3.5% down. However, the credit score needed to buy a house with a mortgage through the Federal Housing Administration is 580. You may be able to qualify with a lower credit score, but you have to put at least 10% down (that’s $25,000 for a $250,000 home).
• PMI: If you don’t want to pay private mortgage insurance on your conventional mortgage, you need to put at least 20% down ($50,000). That said, you might be able to qualify with as little as 3% down, although in that case PMI will be part of the deal.
• Monthly payments: The larger your down payment on a $250,000 home, the smaller your monthly payment will be.
What Does the Monthly Mortgage Payment Look Like for a $250K Home?
There’s no one single monthly mortgage payment you should expect for a $250,000 home, as it depends on several key factors, such as the interest rate, how much money you put down, property taxes and homeowners insurance (which are often added to the monthly mortgage bill), and the loan term.
The table below shows some estimated payments based on how much is the down payment for a $250,000 house, the length of the loan, and the interest rate — but these are examples only. You can use a mortgage calculator to estimate the more exact monthly mortgage payments for a $250,000 home based on your unique situation. Remember that if you purchase at one interest rate, you can always do a mortgage refinance if rates drop significantly.
| Down payment | Fixed interest rate | Loan term | Monthly payment |
|---|---|---|---|
| $0 | 6.00% | 15 years | $2,155 |
| $0 | 7.00% | 30 years | $1,699 |
| $7,500 | 6.00% | 15 years | $2,046 |
| $7,500 | 7.00% | 30 years | $1,532 |
| $25,000 | 6.00% | 15 years | $1,898 |
| $25,000 | 7.00% | 30 years | $1,496 |
| $50,000 | 6.00% | 15 years | $1,687 |
| $50,000 | 7.00% | 30 years | $1,330 |
What to Do Before You Apply for a $250K Mortgage?
Before applying for a $250,000 mortgage, focus on getting your finances in order. Here are a few ways to improve your approval odds and keep the monthly payment affordable:
• Pay down existing debts: Reducing other debts can help boost your credit score and lower your DTI ratio. These both improve your approval odds and make it easier to afford a monthly mortgage payment.
• Save money: Open a high-yield savings account and start saving up for a down payment. The more you save for a down payment, the lower your monthly mortgage payment will be.
• Get preapproved: When you’re ready to start shopping, seek preapproval for your max budget (such as $250,000). Going through this process will give you a pretty solid idea of what you can afford.
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Should I Get Preapproved Before Applying for a Mortgage?
Getting preapproved is helpful in many ways:
• Completing the mortgage preapproval process will let you know whether you’re likely to be approved for the cost of the house you want to purchase. If $250,000 is the top of your budget, see if a lender will be willing to lend you that amount (with the down payment you’re willing to pay).
• Mortgage preapprovals signal to sellers that your offer is legitimate and can help you get your offer accepted, particularly if the housing market is competitive.
Just remember that preapproval is different from prequalification. A preapproval involves a hard credit check, so only get a preapproval if you’re serious about buying and plan to make an offer soon. A lender can tell you how long a preapproval is good for before you apply.
How to Get a $250K Mortgage
Here’s how to get a mortgage for a home priced around $250,000. In fact, these basic guidelines hold true whether you need a modest mortgage or a jumbo loan:
1. Figure out your finances: Make sure you have enough money for the down payment, and look into down payment assistance programs if necessary. Focus on improving your credit score before searching for lenders.
2. Research lenders: Compare several lenders (both online and in person) to see which has the lowest rates and fees.
3. Apply for preapproval: You can likely do this over the phone or online. You’ll need to upload a fair amount of documentation, including pay stubs, tax returns, proof of identification, bank statements, and more.
The Takeaway
The down payment for a $250,000 house depends on the type of mortgage you’re applying for — and the monthly mortgage payment you’re comfortable making. But some first-time homebuyers can get approved for as little as 3% down (that’s $7,500 on a $250,000 house). Finding a mortgage lender with a competitive interest rate and low fees can also keep your costs down.
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
How much should I make to afford a $250,000 house?
The amount of money you should make to afford a $250,000 house depends on several factors, including your other debts, your credit score, the cost of homeowners insurance and property taxes, and the size of your down payment. That said, a salary of around $76,000 a year will help you afford a $250,000 mortgage.
What credit score is needed to buy a $250,000 house?
The credit score needed to buy a house worth $250,000 depends on the type of mortgage you are applying for. Conventional mortgages often require a credit score of 620 or higher. You can qualify for an FHA loan with a score as low as 500 if you put 10% down. VA loans require a minimum credit score of 620. USDA loans usually require a credit score of 640.
How much is a $250K mortgage per month?
The monthly mortgage cost for a $250,000 home loan can vary greatly, depending on the size of the down payment, the interest rate, the length of the loan term, property taxes, and homeowners insurance costs. Budget anywhere from $1,000 to $2,000 a month, though in some cases, it could be even higher or lower.
Photo credit: iStock/Valentyna Yeltsova
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*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.
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.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
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.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
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