The median home sales price in the U.S. was nearly $417,000 in the first quarter of 2025, so it’s not uncommon for first-time homebuyers to find themselves in this price range. The answer to the question “how much down payment do I need for a $400,000 house?” can vary based on the type of home loan and your creditworthiness as a borrower.
Here’s a closer look at how first-time buyers can afford a $400K house, from the down payment to mortgage preapproval and what you can expect for monthly mortgage payments.
Key Points
• First-time homebuyers could make a down payment between 3% and 20% on a $400,000 house.
• Higher down payments reduce monthly mortgage costs; putting down less than 20% means paying for private mortgage insurance.
• An annual income of at least $103,000 is recommended for a $400,000 house, assuming you have no other debts.
• Preapproval for a mortgage enhances buyer credibility and helps clarify costs.
• Additional costs include closing, renovation, moving, property taxes, and homeowner’s insurance.
How Much Income Do I Need to Afford a $400K Home?
The income you’ll need to afford a $400,000 home goes beyond saving up for a down payment. Rather, it’s about your ability to afford the monthly mortgage payment. How much you’ll pay each month depends on whether you pay private mortgage insurance (PMI), the interest rate, and other factors.
Many financial experts suggest spending no more than 30% of your gross monthly income on housing costs. Using this budgeting rule, let’s crunch the numbers with a mortgage payment calculator on what income you’ll need to afford a $400,000 home purchase without overextending your finances.
For example, let’s say you made a 3% down payment of $12,000 on a $400,000 house, which could be possible when buying your first home, depending on your qualifications. Let’s also assume that you take out a 30-year home loan at a 7.00% interest rate. That would amount to about $2,580 for a monthly mortgage payment. To reasonably afford this, you’d need to earn $8,600 per month. In other words, that’s an annual income of around $103,000. This assumes you don’t have any debts beyond your home loan payment.
Also note that this estimate does not include PMI, property taxes, and other costs of homeownership. When crunching the same numbers with a mortgage calculator with taxes and insurance, the monthly payment comes closer to $3,100. This would mean earning $10,300 a month ($123,600 per year) to comfortably afford payments on a $400,000 home.
Calculating home affordability also involves factoring in your existing debts, such as student loans and auto loans, plus other cost of living expenses.
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How Much Is the Down Payment for a $400K House?
Conventional wisdom suggests putting a 20% down payment on a home. Though this helps avoid paying PMI, you may be eligible to put as little as 3% down if you qualify as a first-time homebuyer. Considering these as the two ends of the spectrum, a down payment for a $400,000 house could range from $12,000 to $80,000.
Homebuyers have other upfront expenses to account for when determining how much house they can afford. Notably, closing costs typically add up to 2% to 5% of a home purchase price. There may also be home renovation and moving costs to include in your home-buying budget.
What Are the Down Payment Options for a Home Worth $400K?
How much down payment do you need for a $400,000 house? Here are your potential down payment options depending on the type of mortgage loan you apply for.
• With any mortgage, putting 20% down means not having to pay PMI, which costs 0.5%-1.5% of the home loan amount each year. A 20% down payment is most common with a conventional mortgage, and would amount to $80,000 for a $400,000 home.
• Qualified first-time borrowers could secure a conventional mortgage with a down payment of as little as 3%, amounting to $12,000 in this example. Other buyers may need to fork out 5%, or $20,000, to qualify. Down payment assistance programs can help some first-time buyers, veterans, and other eligible applicants afford a down payment on a home.
• With a government-backed FHA loan, first-time homebuyers could make a down payment of just 3.5%, or $14,000 for a $400,000 house. Borrowers need a credit score of 580 or higher to qualify for this minimum down payment. (You might also get an FHA loan with a score of 500 to 579, but a 10% down payment would be necessary.)
• Other government-backed loans, including VA loans and USDA loans, may not require any down payment to qualify, though putting some money down can help build equity and secure a more competitive rate.
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What Does the Monthly Mortgage Payment Look Like for a $400K Home?
To recap, your monthly mortgage payment is determined by several factors. The interest rate you qualify for is based on your credit score, debt-to-income (DTI) ratio, and other personal financial information. How much money you put down and the length of the loan term — typically 15 or 30 years — also has an impact on the monthly mortgage payment for a $400,000 home.
If you put $12,000 toward a $400,000 home with a 30-year fixed-rate mortgage at 7.00%, you can expect a monthly payment of $2,580. Upping the down payment to 5% or 10%, would cut the monthly payment to around $2,528 and $2,395, respectively. On the other hand, locking in a better interest rate, say 6.50%, would lower a monthly payment from $2,580 to $2,452, using the first example with a 3% down payment.
Your mortgage payments will go toward the loan interest and principal, with a greater share going toward interest during the initial part of the loan term. Making additional payments on the loan principal each month is one strategy for saving on interest and shortening repayment.
What to Do Before You Apply for a $400K Mortgage
Buying a home is often the largest purchase in one’s lifetime and home expenses are a major contributor to the cost of living in the U.S. If time allows, there are some steps you can take to improve your borrower qualifications and secure more favorable loan terms.
Paying off existing debts, especially high-interest debts, can reduce your DTI ratio and the perceived risk for lenders to issue you a mortgage. Having a DTI ratio of 36% or less is preferred, though borrowers may qualify with a higher DTI ratio. Building up more savings toward a down payment and closing costs can also enhance your chances of approval, plus reduce stress on you and your finances.
Should I Get Preapproved Before Applying for a Mortgage?
Home buying can be competitive, so it’s helpful to demonstrate that you’re a serious buyer by getting preapproved before making an offer. The mortgage preapproval process involves submitting documentation about your income and assets. Lenders will evaluate your credit and financial history, too.
If you get preapproved, lenders will provide a letter listing the specific loan amount and interest rate you’re preapproved for. This is not a commitment, and it’s typically only valid for up to 90 days.
How to Get a $400K Mortgage
Applying for a mortgage is a fairly straightforward process that can be done online or in person. The applications require many of the same materials you’d have already gathered for mortgage preapproval, plus information on the property you’re intending to purchase.
It’s important to compare lender offers and find the best mortgage terms before applying. As noted above, a slight change in the interest rate can significantly lower monthly payments and the total interest paid over the life of the loan. Remember, though, that if you aren’t overjoyed with your original interest rate, a mortgage refinance can be an option down the road.
The Takeaway
How much down payment do you need for a $400,000 house? You could put as little as $12,000, or up to $80,000, toward a down payment depending on the type of home loan, your creditworthiness, and whether you’re a first-time buyer. It’s also possible to get a home loan with zero money 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 $400,000 house?
If you follow the 30% rule, which says your housing costs shouldn’t exceed 30% of your gross income, you should make at least $103,000 a year to afford a $400,000 house, assuming a 3% down payment and 7% interest rate on a 30-year fixed rate mortgage. Borrowers with more saved for a down payment could potentially afford a $400,000 house with less income. Those with other debts will need a greater income.
What credit score is needed to buy a $400,000 house?
Credit score requirements to buy a $400,000 house depend on the type of home loan. FHA loans require a minimum credit score of 500, whereas borrowers usually need a 620 credit score to qualify for a conventional mortgage.
How much is a $400K mortgage per month?
The monthly payment on a $400K mortgage depends on the interest rate you qualify for and loan term. A low interest rate of 5.50% could mean a payment of about $2,300 per month, while a higher interest rate of 7.5% could see monthly payments of $2,800. The added cost of homeowners insurance, property taxes, and mortgage insurance could further increase the monthly payment.
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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.
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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.
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