On a salary of $50,000 per year, you can afford a house priced at around $150,000 — that is, as long as you have relatively little debt. However, not everyone earning $50,000 will see this number in response to a loan application. The figure could change significantly depending on where you want to live, interest rates, and how much debt you’re carrying.
Understanding how these factors play into home affordability can get you closer to finding a home you can afford on your $50,000 salary.
Table of Contents
- What Kind of House Can I Afford With $50K a Year?
- Understanding Debt-to-Income Ratio
- How to Factor in Your Down Payment
- Factors That Affect Home Affordability
- How to Afford More House With Down Payment Assistance
- How to Calculate How Much House You Can Afford
- Home Affordability Examples
- How Your Monthly Payment Affects Your Price Range
- Types of Home Loans Available to $50K Households
- FAQ
Key Points
• With $50,000 annual income, if your debt is modest and you put down a reasonable down payment, you may qualify for a starter-home in a lower-cost market.
• The 28/36 rule aims for monthly housing costs to stay under 28% of gross income, and total debt (including mortgage) to stay under 36%.
• Full home affordability depends heavily on your down payment, interest rate, loan term, credit score, and existing debts, in addition to your salary.
• First-time-buyer programs, lower down-payment options, and choosing an affordable area can make homeownership possible on $50K/year.
• Various types of home loans are available, including conventional, FHA, USDA, and VA loans, each with different criteria.
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What Kind of House Can I Afford With $50K a Year?
A $50,000 per year salary is solid, but there’s no denying today’s real estate market is tough. When buying a home, one rule of thumb is to not spend more than three times your annual salary. If you earn $50K a year, that means you can afford to spend around $150,000 on a house.
You’ll need to know the full picture of home affordability to get you into the house you want, starting with your debt-to-income (DTI) ratio.
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Understanding Debt-to-Income Ratio
Your debt-to-income (DTI) ratio may be one of your biggest challenges to home affordability. Each debt you have a monthly payment for takes away from what you could be paying on a mortgage, lowering the mortgage amount you can qualify for.
To calculate your DTI ratio, combine your monthly debt payments — such as credit card debts, student loan payments, and car payments — and then divide the total by your monthly income. This will give you a percentage (or ratio) of how much you’re spending on debt each month. Lenders look for 36% or less for most home mortgage loans.
For example, on a $50,000 annual salary and a $4,166 monthly income, your maximum DTI ratio of 36% would be $1,500. This is the maximum amount of debt lenders want to see on a $50,000 salary.
đź’ˇ Quick Tip: Lowering your monthly payments with a mortgage refinance from SoFi can help you find money to pay down other debt, build your rainy-day fund, or put more into your 401(k).
How to Factor in Your Down Payment
A down payment increases how much home you can afford. The more you’re able to put down, the more home you’ll be able to afford. Borrowers who put down more than 20% also avoid having to buy mortgage insurance. When you don’t have to pay mortgage insurance every month, you can qualify for a higher mortgage — but you do need to consider if putting down 20% is worth it to you.
A mortgage calculator can help you see how much your down payment affects the mortgage you can qualify for.
Factors That Affect Home Affordability
In addition to the debt-to-income ratio and down payment, there are a handful of other variables that affect home affordability. These are:
• Interest rates: When your interest rate is lower, you’ll either have a lower monthly mortgage payment or qualify for a higher mortgage. With higher interest rates, you’ll have a higher monthly mortgage payment and/or qualify for a lower home purchase amount.
• Credit history and score: Your credit score affects what interest rate you’ll be able to get, which is a huge factor in determining your monthly mortgage payment and home affordability.
• Taxes and insurance: Higher taxes, insurance, or homeowners association dues can bite into your house budget. Each of these factors has to be accounted for by your lender.
• Loan type: Different loan types have varying interest rates, down payments, credit requirements, and mortgage insurance requirements which can affect how much house you can afford.
• Lender: You may be able to find a lender that allows for a DTI ratio that is higher than the standard 36%. (Some lenders allow a DTI as high as 50%.)
• Location: Where you buy affects the type of house you can afford. This is one area that you can’t control, unless you move. If you are considering this option, take a look at the best affordable places to live in the U.S.
Recommended: The Cost of Living by State
How to Afford More House With Down Payment Assistance
If you want to be able to afford a more costly house, you may want to look into a down payment assistance program. These programs can help you with funding for a down payment on a mortgage. You can look for programs with your state or local housing authority.
Preference may be given to first-time homebuyers or lower-income families, but there are programs available for a wide variety of situations and incomes.
How to Calculate How Much House You Can Afford
If you want to know how much mortgage you’ll likely be able to qualify for, you’ll want to take a look at these guidelines.
The 28/36 Rule: Lenders look for home payments to be at or below 28% of your gross monthly income. Total debt payments should be less than 36% of your income. These are the front-end and back-end ratios you may hear your mortgage lender talking about.
• Front-end ratio (28%): At 28% or your income, a monthly housing payment from a monthly income of $4,166 should be no more than $1,166.
• Back-end ratio (36%): To calculate the back-end, or debt-to-income ratio, add your debt together and divide it by your income. This includes the new mortgage payment. With monthly income at $4,166, your debts should be no more than $1,500 ($4,166*.36).
The 35/45 Rule: The 35/45 rule is a higher debt level your lender can elect to follow. It’s riskier for them and may come at a higher interest rate for you. This rule allows you housing payment to be 35% of your monthly income and 45% of your total debt-to-income ratio. With a monthly income of $4,166, the housing allowance (35% of your income) increases to $1,458 and the total monthly debt (45% of your income) increases to $1,875.
An easier way to calculate how much home you can afford is with a home affordability calculator.
Home Affordability Examples
Making $50,000 a year gives you around $4,166 to work with each month. Using the 36% debt-to-income ratio, you can have maximum debt payments of $1,500 ($4,166 * .36). In the examples below, taxes ($2,500), insurance ($1,000), and interest rate (6%) remain the same for a 30-year loan term.
Example #1: High-debt borrower
Monthly credit card debt: $200
Monthly car payment: $400
Student loan payment: $200
Total debt = $800
Down payment = $20,000
Maximum DTI ratio = $4,166 * .36 = $1,500
Maximum mortgage payment = $700 ($1,500 – $800)
Home budget = $88,107
Example #2: The super saver
Monthly credit card debt: $0
Monthly car payment: $200
Student loan payment: $0
Total debt = $200
Down payment: $20,000
Maximum DTI ratio = $4,166 * .36 = $1,500
Maximum mortgage payment = $1,300 ($1,500 – $200)
Home budget = $171,925
How Your Monthly Payment Affects Your Price Range
Your monthly payment directly affects the mortgage you’re able to qualify for. The more monthly debts you have, the lower the mortgage you’ll be able to qualify for. That’s why it’s so important to take care of debts as soon as you can.
It’s also important to get the best interest rate you can. Shopping around for lenders and building your credit score can both save you money and improve home affordability. A home loan help center is a good place to start the process of looking for a mortgage.
Recommended: 10 Strategies for Building Credit Over Time
Types of Home Loans Available to $50K Households
How much home you can afford also comes down to the different types of mortgage loans. Here are some common options:
• FHA loans: If your credit isn’t ideal, you may be able to secure a Federal Housing Administration mortgage. Though FHA loans are more costly, you can still be considered with a credit score as low as 500. FHA mortgage insurance, however, makes them more expensive than their alternatives.
• USDA loans: If you’re in a rural area that is covered by United States Department of Agriculture loans, you’ll want to consider whether the low interest, no-down-loan will make sense for you.
• Conventional loans: Conventional financing offers the most competitive interest rates and terms for mortgage applicants who qualify.
• VA loans: If you have the option of financing with a U.S. Department of Veterans Affairs loan, with few exceptions, you’ll generally want to take it. It offers some of the most competitive rates, even for zero-down-payment loans. It also comes with no minimum credit score requirement, though the final say on whether or not you can get a loan with a low credit score is up to the individual lender.
💡 Quick Tip: Don’t have a lot of cash on hand for a down payment? The minimum down payment for an FHA mortgage loan is as low as 3.5%.
The Takeaway
Your $50,000 salary is the first step in qualifying for the home mortgage loan you need to buy a house. To position yourself for the best possible borrowing scenario, consider paying down debt, working on your credit score, applying for down payment assistance, adding a co-borrower, or some combination of the above. With these moves, home affordability improves a great deal.
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
Is $50K a good salary for a single person?
A $50,000 salary is good in terms of covering the cost of living in many parts of the U.S. With proper budgeting, it can even put you on the path to affording to purchase your own home.
What is a comfortable income for a single person?
Generally, an income of $40,000 to $60,000 per year is considered comfortable in many U.S. cities. This range allows for a decent standard of living, covering basic needs, some savings, and occasional luxuries. Adjustments may be needed based on cost of living and personal financial goals.
What is a livable wage in 2025?
A livable wage varies widely depending on where you live. According to the Living Wage Institute at the Massachusetts Institute of Technology, for a family with two adults and two kids, a livable wage in 2025 might range from around $85,000 annually in Alabama or Kentucky to more than $146,000 in Massachusetts.
What salary is considered rich for a single person?
A salary of $400,000 per year would put you in the top 2% of earners in 2025. However, the definition of “rich” varies by person. One person may feel rich earning $100,000 per year, whereas for another, it may take $750,000 per year.
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