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SoFi Plus members earn an unlimited 1% match on all recurring deposits to their SoFi Invest® account, paid in cash rewards.
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1Read the full terms and limitations. Bonus calculated on monthly net recurring deposits via ACH. Benefit may be combined with SoFi Invest 1% match on IRA contributions.
What a 1% match on recurring deposits could do for you.
Build healthy habits.
Investing regular, fixed amounts is a great way to build an investing discipline and stay on top of long-term goals. When you make recurring deposits to your investment account, we’ll reward you with a 1% match.
Earn an unlimited match.
There’s no cap on the 1% match—the sky’s the limit! Simply set your recurring deposit when you want and how you want for any SoFi Invest account.
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Open an auto invest account through SoFi Wealth LLC and start trading at regular intervals. If you’re taking advantage of dollar-cost averaging, you could lower your average cost per share and reduce the impact of market volatility on your portfolio.
How to start earning a 1% match with recurring deposits to SoFi Invest®.
Join SoFi Plus.
Two ways to join: Pay just $10/month2 or set up direct deposit to a SoFi Checking and Savings account. Subscribe to SoFi Plus now.
Now, as a SoFi Plus member, you’re eligible for a 1% match on recurring SoFi Invest deposits. Set up your deposit to start earning.
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There are two ways to set up a recurring deposit. See our FAQs to learn more.
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FAQs
How do I set up a recurring deposit to my SoFi Invest® account? There are two ways to set up a recurring deposit:
1. Set up a weekly, biweekly, or monthly ACH transfer into your SoFi Invest® account. You can do this by adding cash to your Invest account and changing the frequency from “one-time, today” to recurring on a weekly, bi-weekly, or monthly cadence.
2. If you have Autopilot through a SoFi Checking & Savings account from SoFi Bank, N.A, you can use it to set up a recurring deposit into your Automated Invest (SoFi Wealth, LLC ) account. Afterwards, click the “Set up Autopilot” button to start your recurring investment. Next, select the dollar amount or percentage you want to invest from each paycheck, and we’ll automatically transfer it into your new account.
Remember that deposits to your Active Invest (SoFi Securities, LLC) account aren’t automatically invested. You’ll need to make a trade for those funds to be invested in the market. However, deposits to your Automated Invest (SoFi Wealth, LLC) account will be traded automatically based on your pre-set investing strategy..
What accounts are eligible for a Recurring Deposit Match and how does it work? You can earn a match on your recurring deposit into any SoFi Invest account type (automated or self-directed brokerage). This includes recurring contributions into your IRA up to the Internal Revenue Service (IRS) contribution limit. Just remember the bonus is calculated on each settled recurring deposit via automated clearing house (ACH) transfer or instant cash transfer. ACH transfer limits do apply.
How will I receive my 1% match?
The 1% match is paid out in cash into the same account receiving the scheduled recurring deposit. For a limited time, some members may receive their bonus in the form of SoFi Rewards points instead of cash. The rewards points are equal in value to the cash and can be redeemed for their cash value. You can learn more about how to redeem your rewards points here.
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Please note that the points will expire within 90 days of earning them if you don’t enroll in the SoFi Member Rewards Program. For more details, please see the SoFi Member Rewards terms.
When will I be paid my 1% match? The match will be paid out within 5 business days of the deposit being settled, subject to verification of eligibility and compliance with these terms.
Is there a penalty for withdrawing funds? Yes, funds must remain in your SoFi Invest account for a period of five years to be eligible for the bonus. If your deposit is removed prior to the five year period, you will be subject to an early withdrawal fee and SoFi will remove a proportional amount of the bonus from the member’s account. The proportional amount is based on the breach in retention value. In the event of an ACAT transfer out, there will be an early withdrawal fee for the entire match amount.
Examples:
Scenario 1: If you deposit $1,000 into a SoFi Invest account, you’ll earn a $10 match. If you withdraw $600 less than 5 years from the deposit date, you’ll incur an early withdrawal fee of $5.94.
Scenario 2: If you deposit $1,000 into a SoFi Invest account, you’ll earn a $10 match. Your account balance then increases to $1,310 due to investment gains. If you withdraw $250 less than 5 years from the deposit date, you’ll incur an early withdrawal fee of $0 because your equity balance remains above the pre-promotion equity in the account, plus the qualifying deposit and match amount.
Scenario 3: If you deposit $1,000 into a SoFi Invest account, you’ll earn a $10 match. Your account balance then decreases to $950 due to investment losses. If you withdraw $250 less than 5 years from the deposit date, you’ll incur an early withdrawal fee of $3.07 because your equity balance fell below the pre-promotion equity in the account, plus the qualifying deposit and match amount.
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How employer contributions can make a big difference.
See how just $100 a month really adds up. Employers can decide how much they’d like to contribute to employee student loans each month—up to $5,250 per employee, per year. Employees who receive just $100 per month can save up to $17,076 over the lifetime of their loan and pay the loan off one year and eight months faster.7
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Subject Line: Here’s why offering student loan benefits is good for everyone.
Hi there,
Many of us have student loans today, over 43 million actually! It’s a big bill to pay each month. Some of us are now facing these bills again with the ending of the student loan repayment pause—and, to be totally transparent, it’s stressful. This kind of stress can show up at work in the form of distraction, depression, and decreased productivity.
I do have some great news, though. I recently discovered that SoFi can help employers offer student loan benefits to their employees. SoFi makes it easy to offer them and they’re tax free up to $5,250 per employee, per year. They can even help employees get ahead on their retirement with new provisions under the SECURE 2.0 Act.
SoFi’s 1,100+ partners are already offering student loan benefits and have seen them make a positive difference in their employees’ lives. These benefits are also helping them recruit and retain great employees. You can learn more at SoFiatWork.com, call 855-456-SOFI, or download this PDF.
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• Mortgage rates in Arkansas trend closely to the national average — sometimes higher or lower.
• Mortgage interest rates are influenced by the economy, Federal Reserve’s monetary policy, and supply and demand for mortgages.
• Higher interest rates mean higher monthly mortgage payments, while lower interest rates result in lower monthly payments.
• Arkansas offers various mortgage types, including fixed-rate mortgages, adjustable-rate mortgages (ARMs), FHA loans, VA loans, and USDA loans.
• The cost of living in Arkansas is significantly lower than the national average.
Introduction to Mortgage Rates
Unlike some interest rates, mortgage rates are not determined by a single benchmark. Rather, they’re the result of a complex interplay of economic conditions and the borrower’s financial profile. Economic factors that influence mortgage rates include the Federal Reserve’s interest rate policy, inflation, and unemployment rates. Borrower-specific factors such as credit score, down payment amount, income, assets, and type of mortgage loan also play a significant role in determining the interest rate offered.
Where Do Mortgage Rates Come From?
The Federal Reserve, often referred to as the Fed, holds the key to shaping mortgage rates. The Fed sets short-term interest rates, which serve as benchmarks for other interest rates, including those for home loans. While mortgage rates are not directly tied to Fed rates, they tend to follow similar economic trends.
When the Fed raises short-term interest rates, it becomes more expensive for banks to borrow money. As a result, banks often pass on this increased cost to consumers in the form of higher mortgage rates. Conversely, when the Fed lowers interest rates, mortgage rates tend to follow suit, making it more affordable for borrowers to obtain a home loan.
How Interest Rates Affect Home Affordability
Mortgage rates have a profound impact on home affordability. Even seemingly small changes in interest rates can significantly affect monthly mortgage payments and, consequently, the overall cost of purchasing a home.
The average home value in Arkansas is $208,000. If you buy a home for that amount and make a 20% down payment, your mortgage will be $166,400. A 30-year loan at 5.50% gives you a monthly payment of $944. The same loan at 6.50% interest results in a monthly payment of $1,051. An additional $107 per month may not be painful for some buyers, but for others it might make the home unaffordable. And those who can afford the larger payment will pay a whopping $38,506 in additional interest over the life of the loan.
Should Homebuyers Wait for Interest Rates to Drop?
First-time homebuyers often face a dilemma: Should they purchase a home now or wait for mortgage rates to drop? While it’s impossible to predict future interest rate movements with certainty, there are other factors to consider. Waiting may mean missing out on the opportunity to build equity and take advantage of favorable market conditions.
Homeowners who aren’t thrilled with their current mortgage rate can always refinance in the future when rates decrease. Refinancing allows you to obtain a lower interest rate on your existing mortgage, potentially saving thousands of dollars in interest payments over time.
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Examining historical mortgage rate trends in Arkansas can offer valuable insights into potential future rate movements. While rates have experienced fluctuations over the years, they currently hover around the 50-year average, indicating a relatively stable mortgage environment. (The FHFA stopped reporting state interest rates after 2018.)
Year
Utah Rate
U.S. Rate
2000
7.98
8.14
2001
6.82
7.03
2002
6.55
6.62
2003
5.84
5.83
2004
6.00
5.95
2005
5.94
6.00
2006
6.52
6.60
2007
6.47
6.44
2008
6.15
6.09
2009
4.93
5.06
2010
4.70
4.84
2011
4.57
4.66
2012
3.68
3.74
2013
3.94
3.92
2014
4.12
4.24
2015
3.88
3.91
2016
3.75
3.72
2017
4.08
4.03
2018
4.61
4.57
Source: Federal House Finance Agency
Historical U.S. Mortgage Rates
To provide a broader perspective, let’s explore historical U.S. mortgage rates. Over the past 50 years, mortgage rates have experienced significant fluctuations, reaching peaks of 18.00% during periods of economic uncertainty and declining to under 3.00% during times of economic stability. The current rates in Arkansas align with the long-term average, indicating a relatively balanced mortgage environment.
Factors Affecting Mortgage Rates in Arkansas
Many factors contribute to the determination of mortgage rates in Arkansas and across the nation. These can be broadly categorized into two groups: economic and consumer factors.
Economic Factors
• The Fed: The Federal Reserve, often referred to as the Fed, sets the federal funds rate, which serves as a benchmark for other interest rates, including those for home loans. When the Fed raises the federal funds rate, it becomes more expensive for banks to borrow money, leading to higher mortgage rates.
• Inflation: Inflation, the general increase in prices and fall in the purchasing value of money, also impacts mortgage rates. As inflation rises, the purchasing power of money decreases, making it more expensive for lenders to lend money. To compensate for this, lenders may increase interest rates to maintain their profit margins.
• Unemployment rate: The unemployment rate plays a role in determining mortgage rates. A low unemployment rate generally indicates a strong economy, which often leads to increased demand for housing. This increased demand can put upward pressure on home prices and, consequently, mortgage interest rates.
Consumer Factors
• Credit score: A borrower’s credit score serves as a crucial indicator of their creditworthiness. A higher credit score reflects a history of responsible borrowing and repayment, making borrowers less risky in the eyes of lenders. As a result, individuals with higher credit scores typically qualify for lower mortgage interest rates.
• Down payment: The down payment amount made by a borrower can influence the mortgage interest rate. A larger down payment reduces the loan amount required, making the borrower less risky for the lender. Consequently, borrowers who make a larger down payment often receive lower mortgage interest rates.
• Income and assets: A steady income and sufficient assets contribute to a borrower’s financial stability and ability to repay the loan. Lenders assess a borrower’s income and assets to determine their creditworthiness. Borrowers with a stable income and substantial assets are considered less risky and may qualify for lower mortgage interest rates.
• Type of mortgage loan: The type of mortgage loan selected can also impact the interest rate. Adjustable-rate mortgages (ARMs) often offer lower initial rates compared to fixed-rate mortgages. Government-backed loans, such as VA mortgages, may have lower rates. And shorter loan terms typically come with lower interest rates than longer loan terms.
Arkansas offers a diverse range of mortgage types to cater to the needs of different homebuyers. These include fixed-rate mortgages, adjustable-rate mortgages (ARMs), FHA loans, VA loans, and USDA loans.
Conventional loans, which are not backed by government agencies, offer flexibility in terms of interest rates and loan amounts. They can be fixed-rate or adjustable-rate.
Fixed-Rate Mortgage
Fixed-rate mortgages provide stability and predictability by locking in the interest rate for the entire loan term. This means that the monthly principal and interest payments remain the same throughout the life of the loan, regardless of fluctuations in market interest rates.
Fixed-rate mortgages are commonly available in terms of 10, 15, 20, or 30 years. The choice of loan term depends on the borrower’s financial situation and preferences, with shorter terms typically resulting in higher monthly payments but lower total interest paid over the life of the loan.
Adjustable-Rate Mortgage (ARM)
Adjustable-rate mortgages (ARMs) provide an initial interest rate that is lower than fixed-rate mortgages. This can be an attractive option for borrowers who plan to sell their home or refinance before the fixed-rate period ends.
In most cases, an ARM rate will 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.
It’s important to understand that adjustable-rate mortgages can potentially lead to higher monthly payments in the future.
FHA Loan
FHA loans, backed by the Federal Housing Administration, offer more flexible eligibility requirements compared to conventional loans. They are designed to make homeownership more accessible to first-time buyers and individuals with less-than-perfect credit.
These loans do require an upfront mortgage insurance premium (MIP) and monthly premiums. The upfront cost is usually 1.75% of the base loan amount, and can be rolled into the loan. The monthly MIP for new homebuyers is typically 0.55%. For a $160,000 mortgage, that’s upfront MIP of $2,800 and monthly MIP of $88.
VA Loans
VA loans are exclusively available to veterans, active-duty military members, certain Reserve and National Guard members, and surviving spouses. These loans are backed by the U.S. Department of Veterans Affairs (VA) and offer competitive interest rates and flexible eligibility requirements. A significant advantage of VA loans is that they do not require a down payment. Borrowers obtain these loans from private lenders after first obtaining a certificate of eligibility from the VA.
USDA Loans
USDA loans, provided by the U.S. Department of Agriculture (USDA), are tailored to low-income borrowers seeking to purchase a home in a rural area. These loans offer competitive interest rates and do not require a down payment.
Jumbo Loans
Conventional mortgage loans typically have a maximum loan amount, known as the conforming loan limit, set by the Federal Housing Finance Agency (FHFA). For 2026, the conforming loan limit for a single-family home is $832,750. Any mortgage amount above that limit requires a jumbo loan.
Current mortgage rates by state.
Compare current home interest rates by state and find a mortgage rate that suits your financial goals.
Select a state to view current rates:
Popular Places to Get a Mortgage in Arkansas
The choice of location can significantly impact the mortgage process. Homebuyers should consider not just home affordability but the overall cost of living when selecting a place to purchase a home.
The Cost of Living Index (COLI) provides a comparison of the cost of living in different cities and states relative to the average cost of living in the U.S. By considering the COLI, homebuyers can assess the affordability of living in a particular location.
Least Expensive Locations
Arkansas as a whole is 22.5% less expensive than the national average, and the average home value is $208,000. Here are a few areas worth exploring:
• Fort Smith:COLI 76.6 $178,000
• Pine Bluff:COLI 67.9 $79,000
• Searcy:COLI 75.1 $206,000
• Texarkana:COLI 72.5 $163,000
Most Expensive Locations
The most expensive places to live in Arkansas, based on the Cost of Living Index and average home value, include:
Tips for Securing a Competitive Mortgage Rate in Arkansas
If you’re buying your first home, you may realize that obtaining a competitive mortgage rate can significantly reduce the overall cost of borrowing and save tens of thousands of dollars in interest payments over the life of the loan. Here are some tips for securing the lowest available rate.
Compare Interest Rates and Fees
Shopping around and comparing interest rates and fees from different lenders can help you secure the best possible mortgage deal. Lenders offer varying rates and terms, so make sure to compare multiple options before making a decision.
In addition to the interest rate, borrowers should also consider any upfront costs or closing fees associated with the loan.
Get Preapproved
Going through the mortgage preapproval process, which involves submitting most of the documentation required for a mortgage application, strengthens a homebuyer’s position in the purchasing process. It demonstrates to sellers that the buyer is a serious and qualified candidate, potentially increasing the chances of a successful purchase.
Depending on the interest rate environment, borrowers may want to consider locking in their rate while they’re getting preapproved. Lenders typically offer a rate lock option for a fee, which allows borrowers to secure the current interest rate for a specified period, usually ranging from 30 to 90 days.
Arkansas Mortgage Resources
The Arkansas Development Finance Authority (ADFA) provides a range of resources and programs to support homebuyers, especially first-time buyers and individuals with limited financial means. These resources can help make the homebuying process more accessible and affordable.
First-Time Homebuyer Programs
Arkansas offers several programs specifically designed to assist those who qualify as a first-time homebuyer (meaning you haven’t owned a primary residence within the last three years). These programs may provide financial assistance, education, and counseling to help individuals achieve homeownership.
• The ADFA Move-Up program offers an affordable 30-year fixed-rate mortgage to low- to moderate-income homebuyers.
• The ADFA Smart Start program provides below-market interest rates on 30-year fixed-rate mortgages.
Down Payment Assistance
Down payment assistance programs can help reduce the upfront costs of purchasing a home by providing grants or low-interest loans to cover a portion of the down payment. These programs are particularly beneficial for first-time buyers or those with limited savings.
If you qualify for an ADFA first mortgage, you may also benefit from a second mortgage for down payment or closing costs. The down payment assistance ranges from $1,000 to $15,000 and comes in the form of a 10-year second mortgage with a rate that matches your ADFA first mortgage.
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.
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 Arkansas: Exploring Your Possibilities
A cash-out mortgage refinance, obtained through a conventional mortgage lender, allows homeowners to borrow against the equity in their home and receive the difference in cash. This can be a good option for homeowners who need to access cash for major expenses, such as home renovations, education, or debt consolidation.
Homeowners with FHA-insured mortgages may benefit from the FHA Streamline Refinance program. This program allows borrowers to refinance their existing FHA loan into a new loan with a lower interest rate, often with less documentation and without the need for a new appraisal.
VA loan holders may consider the Interest-Rate Reduction Refinance Loan (IRRRL) to lower their monthly mortgage payments. This program allows eligible borrowers to refinance their VA loan into a new loan with a lower interest rate, potentially reducing their monthly payments.
Closing Costs and Fees in Arkansas: What to Expect
Closing costs associated with purchasing a home in Arkansas typically range between 2% and 5% of the purchase price. These costs may include loan origination fees, appraisal fees, title insurance, and other administrative charges.
The specific closing costs incurred by a homebuyer in Arkansas can vary depending on the value of the property and its location. Higher-priced homes and properties in certain areas may be associated with higher closing costs.
The Takeaway
Arkansas presents a diverse range of mortgage options, catering to the needs of different homebuyers. By staying informed about current mortgage rates, exploring assistance programs, and carefully considering refinancing options, individuals can make strategic decisions that align with their financial goals and achieve successful homeownership in Arkansas.
Remember, it is always advisable to consult with a mortgage lender or financial advisor to obtain personalized advice tailored to your specific financial situation and goals.
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.
Predicting future mortgage rate movements with certainty is challenging. However, monitoring economic indicators, such as inflation, unemployment rates, and Federal Reserve policies, can provide insights into potential rate trends.
Will mortgage rates ever go back to normal?
The definition of “normal” mortgage rates varies over time. Mortgage rates are influenced by various economic factors, and what is considered normal can change based on historical trends and current market conditions.
Will Arkansas home prices ever drop?
Arkansas home prices are already below the national average, as is the cost of living. While prices may drop in the future, don’t let that stop you from house hunting if you’re ready to make a move.
Is it a good time to buy a house in Arkansas?
The decision of whether it is a good time to buy a house in Arkansas depends on individual circumstances, financial readiness, and market conditions. Factors such as mortgage rates, home prices, personal financial situation, and long-term goals should be carefully considered.
How to lock in a mortgage rate?
To lock in a mortgage rate, you can work with a lender to secure a rate lock agreement. This agreement guarantees a specific interest rate for a certain period, typically ranging from 30 to 90 days. There may be a fee associated with locking in the rate.
How do mortgage interest rates work?
Mortgage interest rates are determined by various factors, including the Federal Reserve’s interest rate policies, inflation, unemployment rates, borrower credit scores, loan amounts, down payments, and loan terms. Lenders assess these factors to determine the level of risk associated with a loan and set interest rates accordingly.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
SoFi Loan Products
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.
‡Up to $9,500 cash back: HomeStory Rewards is offered by HomeStory Real Estate Services, a licensed real estate broker. HomeStory Real Estate Services is not affiliated with SoFi Bank, N.A. (SoFi). SoFi is not responsible for the program provided by HomeStory Real Estate Services. Obtaining a mortgage from SoFi is optional and not required to participate in the program offered by HomeStory Real Estate Services. The borrower may arrange for financing with any lender. Rebate amount based on home sale price, see table for details.
Qualifying for the reward requires using a real estate agent that participates in HomeStory’s broker to broker agreement to complete the real estate buy and/or sell transaction. You retain the right to negotiate buyer and or seller representation agreements. Upon successful close of the transaction, the Real Estate Agent pays a fee to HomeStory Real Estate Services. All Agents have been independently vetted by HomeStory to meet performance expectations required to participate in the program. If you are currently working with a REALTOR®, please disregard this notice. It is not our intention to solicit the offerings of other REALTORS®. A reward is not available where prohibited by state law, including Alaska, Iowa, Louisiana and Missouri. A reduced agent commission may be available for sellers in lieu of the reward in Mississippi, New Jersey, Oklahoma, and Oregon and should be discussed with the agent upon enrollment. No reward will be available for buyers in Mississippi, Oklahoma, and Oregon. A commission credit may be available for buyers in lieu of the reward in New Jersey and must be discussed with the agent upon enrollment and included in a Buyer Agency Agreement with Rebate Provision. Rewards in Kansas and Tennessee are required to be delivered by gift card.
HomeStory will issue the reward using the payment option you select and will be sent to the client enrolled in the program within 45 days of HomeStory Real Estate Services receipt of settlement statements and any other documentation reasonably required to calculate the applicable reward amount. Real estate agent fees and commissions still apply. Short sale transactions do not qualify for the reward. Depending on state regulations highlighted above, reward amount is based on sale price of the home purchased and/or sold and cannot exceed $9,500 per buy or sell transaction. Employer-sponsored relocations may preclude participation in the reward program offering. SoFi is not responsible for the reward.
SoFi Bank, N.A. (NMLS #696891) does not perform any activity that is or could be construed as unlicensed real estate activity, and SoFi is not licensed as a real estate broker. Agents of SoFi are not authorized to perform real estate activity.
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By Jp Wu |
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Home Affordability Calculator
How Much House Can I Afford?
House hunting can be stressful. That’s why we are bringing you the “Houseculator.” Just input three quick numbers, and we’ll tell you how much house you could really afford. This is just one example of SoFi’s suite of financial tools working better together to help you achieve your home goals.
Preparing to buy a house? Call us for a complimentary mortgage consultation or get pre-qualified online.
How Much Mortgage Can I Afford?
The size of the mortgage you may be offered depends on your income, debts, credit history, assets, and down payment.
Fortunately, you can get an idea of how much of a mortgage you can afford by using calculators (like the one above) and prequalifying with lenders.
An old standard, the 28/36 rule, says that your mortgage payment shouldn’t be more than 28% of your monthly gross income and 36% of your total debt.
Mortgage lenders may run your financial information through a few different calculations when determining how much house you can afford based on income. You can do the math as well for a sense of how much house you can afford.
Ways to Calculate How Much House You Can Afford
Mortgage lenders may run your financials through a few different calculations when determining how much house you can afford based on income.
1. Debt-to-Income Ratio
Debt-to-income ratio is simply your total debt divided by your total income, shown as a percentage. Lenders use the ratio to help determine how much mortgage you can afford.
Generally, 43% is the highest acceptable ratio a buyer can have and still obtain a Qualified Mortgage (a category of lower risk loans). To assess your ratio, plug your numbers into a home affordability calculator.
Example of DTI: To compute your DTI, simply add up all your monthly debts and divide by your gross monthly income, as in this sample:
• Auto loan: $320
• Student loans: $400
• Credit cards: $250
• Rent payment: $1,200
That’s $2,170 in monthly obligations. Now let’s say gross monthly income is $7,500.
$2,170 / $7,500 = 0.289
Multiply the result by 100 for a DTI ratio of nearly 29%, meaning 29% of gross monthly income is going toward debt repayment.
2. The 28/36 Rule
The 28/36 rule combines two ratios that lenders use to determine home affordability based on income and debt. The first number sets 28% of gross income as the maximum total mortgage payment, including principal, interest, taxes, and insurance. The second number sets the limit on your mortgage payment plus any other debts you owe at no more than 36% of your gross income.
Example of the 28/36 rule: If your gross income is $6,000 per month, your magic numbers work out to be $1,680 and $2,160. According to this rule, you should aim for a monthly mortgage payment of $1,680, as long as your total debt (including credit cards, car payment, etc) doesn’t exceed $2,160.
You can try to follow the 28/36 in your household budget to get your finances in order prior to applying for a mortgage.
3. The 35/45 Rule
Another option is to use the 35/45 method, which recommends that you spend no more than 35% of your gross income on your mortgage, and no more than 45% of your after-tax income to pay for all debt, including your mortgage.
Example of the 35/45 rule: Let’s say your gross monthly pay is $5,000 and your take-home income is $4,000. In this scenario, you should spend between $1,750 (5,000 x .35) and $1,800 (4,000 x .45) on your debt payments.
This model gives you a little more flexibility. However, if a large portion of your income already goes toward debt, other methods might be more suitable.
4. The 25% After-Tax Rule
With the 25% method, you spend no more than 25% of your after-tax income on your mortgage. If you make $4,000 monthly after taxes, you should spend no more than $1,000 per month on your mortgage. Because you are using a lower percentage with this method, it gives you less spending power than the other methods above. It’s a more conservative financial choice, and would allow room in your budget if, say, you were planning to have your first child or take on a new car payment after purchasing a home.
Example of the 25% after-tax rule: If you make $4,000 monthly after taxes, you should spend no more than $1,000 per month on your mortgage (4,000 x .25).
Remember, all of these methods are just benchmarks to help you decide how much you can afford. You’ll also need to consider your monthly budget and other financial goals (saving for a wedding, buying a second car, putting aside money for your children’s college) when determining a feasible mortgage amount. Using a home affordability calculator can help you refine and customize your estimate so you can see how different factors influence the price of the home you can afford.
Factors That Affect How Much House You Can Afford
Beyond the amount of debt and income you have, there are several factors that will affect how much house you can afford — primarily your down payment and credit score.
Your Down Payment
The larger the down payment you have saved, the more house you can afford. If you can manage at least a 20% down payment, you can avoid mortgage insurance, which will save you hundreds every month.
That said, you can get a mortgage with a smaller down payment — sometimes as little as 3% — through both conventional lenders or government-sponsored programs. And many homebuyers do: In an April 2024 SoFi survey of 500 would-be buyers, more than 60% of people said they were planning to put down 20% or less. Seven percent of buyers were planning zero-down-payment purchases.
If you’re selling your current home before buying a new one, the value of your home will ultimately determine your down payment. Be modest in your appraisal, or get the help of an experienced real-estate agent.
Another factor that will determine how much house you can afford is the interest rate of your loan. Usually, the lower your interest rate, the lower your monthly payment. To qualify for the most favorable interest rates, you must have a strong credit score and a good financial standing.
While it’s easy to assume that a slight interest rate increase won’t impact your loan that much, this is far from the truth. Even an increase of two percentage points can cost you thousands of dollars over the term of your loan and add hundreds of dollars to your monthly mortgage payment.
Additionally, did you know mortgage rates may vary by state?
Current Mortgage Rates by State
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
Your Credit Score
Your credit score tells lenders the probability of timely loan repayment. A higher credit score demonstrates to lenders that you manage money responsibly. Since lenders don’t want to give funds to those who lack financial responsibility or likely won’t repay the debt, they set credit score guidelines. (In SoFi’s recent survey, more than one in 10 homebuyers (11%) said an insufficient credit score was one of the challenges they were facing.) Credit score guidelines help determine if they will approve a home loan.
Conventional mortgage loans typically require a credit score of 620 or higher. Jumbo loans may require a minimum score of 700. FHA loans allow a credit score as low as 500, while USDA loans set the bar at 580.
Let’s say you apply for an FHA loan, a mortgage insured by the U.S. Federal Housing Authority. You’ll need a credit score of 580 or above to be eligible for 3.5% down payment. If you have a credit score below 500, you will need at least a 10% down payment.
Applying for a prequalification or preapproval will help you pinpoint how your credit score will impact the kind of house you can afford. Basically, a preapproval estimates the loan terms and loan amount you may qualify for, making it easier to determine the mortgage payment you can afford.
Debt-to-Income Ratio
A debt-to-income (DTI) ratio is the percentage of your income that goes toward paying off your debt each month. Credit card, car, and student loan payments all go into your total DTI. The more debt you have, the higher your DTI will be. In addition to your credit score and salary, lenders look at your DTI to assess how much house you can afford.
Generally, lenders use a 36% DTI as a good benchmark for loan approval. However, some lenders will approve a loan if you have a higher DTI.
Annual Salary
When you apply for a mortgage, lenders use your salary as one of the determining factors of mortgage payment affordability. Lenders do this because they don’t want to shell out funds to borrowers who can’t afford the monthly payments. Thus, taking a look at your salary will help the lender assess if the payment works within your budget.
Unlike your credit score, lenders don’t have salary parameters for approving a mortgage. However, you must provide documentation to support how much you make. Lenders will usually want to review your W-2s and pay stubs (or 1099s for self-employed folks). If your income isn’t consistent throughout the year, either due to self-employment or seasonal work, your lender will typically want an explanation of the variations in the income stream.
Mortgages insured by the Federal Housing Administration are issued by private lenders like banks, credit unions, and mortgage companies that offer them, which factor an applicant’s credit score (sometimes as low as 500) and two ratios into an offer of an FHA loan:
• DTI ratio. Up to 50%, if the credit score is at least 580 and other qualifications are in place.
• Front-end ratio, or the ratio of proposed monthly mortgage payments to monthly income. Can be as high as 40% if the credit score is at least 580.
If your credit score is from 500 to 579, you may be able to get an FHA loan and put 10% down. If your score is 580 or higher, you may put as little as 3.5% down.If you have a credit score below 500, you will need at least a 10% down payment.
Home loan limits vary by area for traditional FHA loans, which may be used for up to four units as long as the buyer lives in one unit. An upfront mortgage insurance payment of 1.75% of the purchase price and annual mortgage insurance premiums (MIP) apply.
How Much House Can I Afford With a VA Loan?
The Department of Veterans Affairs issues some home loans directly, but most VA loans are guaranteed in part by the VA and procured from private lenders.
VA loans are for active-duty service members, veterans, and some surviving spouses. Lenders often look for a minimum credit score in the low to mid-600s and a DTI of 41% or under, but those figures are not set in stone.
There is no home purchase limit if a borrower has never used a VA loan, has paid off a VA loan and sold the property, or has had a foreclosure or short sale but repaid the VA in full.
No down payment is required as long as the sales price of the one- to four-unit owner-occupied property or VA-approved condo does not exceed the appraised value. Most borrowers will pay a one-time funding fee of 1.4% to 3.6% of the amount being borrowed.
Ready to start your home buying journey?
Get in touch with a Mortgage Loan Officer for a complimentary mortgage consultation. If you’re ready to jump in, get pre-qualified online in minutes.
How Much House You Can Afford Based on Annual Income
By now, you have a good idea of how much home you can afford. However, the chart below might help you visualize the type of home you’ll be able to buy based on your income.
Using a consistent interest rate helps you see the difference clearly; in the real world, of course, your interest rate may vary based on lender, your credit rating, your down payment and more. The chart assumes:
• 10% of monthly income going toward debt payments
• 30 year mortgage term
• 6.29% interest rate
• 25% of salary used for a down payment
28% = Home Price
36% = Total Debt
What kind of house can I afford making 40K a year?
$97,141
$136,261
What kind of house can I afford making 50K a year?
$121,463
$170,363
What kind of house can I afford making 60K a year?
$145,638
$204,319
What kind of house can I afford making 70K a year?
$169,960
$238,421
What kind of house can I afford making 80K a year?
$194,282
$272,523
What kind of house can I afford making 90K a year?
$218,457
$306,478
What kind of house can I afford making 100K a year?
$242,779
$340,580
Expenses That May Change How Much House You Can Afford
By now, you have a good indication of how much house you can afford based on income, debt, down payment, and credit score. If you’re ready for the next level of detail, keep these expenses in mind to help you avoid any budget-busting surprises.
Insurance
The cost of homeowners insurance varies dramatically by area — it’s no wonder that 39% of would-be buyers in SoFi’s survey said home insurance costs were a top concern for them. Oklahoma and Texas have the highest average homeowners insurance cost at around $3,700 per year. That’s because homes there have a higher chance of being destroyed by a tornado. Areas with fewer natural disasters cost around $900. Homeowners insurance is a part of your 28% mentioned above. If your premium is especially high, you may need to pick a home at a lower price point.
Homeowners Association (HOA)
In some neighborhoods and apartment buildings, a monthly homeowners association (HOA) fee helps pay for communal services like landscaping and elevator maintenance. A higher HOA fee will reduce how much you can afford to a surprising degree. Be sure to factor in the HOA fee when calculating your mortgage payment, and remember that HOA fees aren’t fixed — they can change from year to year, and they rarely go down. Fully 26% of homebuyers said HOA fees were a top concern for them in SoFi’s survey.
When homeowners have less than a 20% down payment, they are required to carry something called mortgage insurance, or private mortgage insurance (PMI). The amount is a percentage of your loan, so the larger your mortgage, the larger mortgage insurance payment you’ll have.
Other Expenses
But wait, there’s more! These expenses won’t affect your loan but can still have a major impact on your budget.
• Closing costs. Expect to pay between 3% and 5% of the loan amount in closing costs (lawyer fees, home inspection, etc). For the average $450,000 home in the U.S., that’s at least $13,500. Sometimes you can roll your closing costs into your loan, but that’s more common with a refinance.
• Maintenance. The costs of homeownership can be quite hefty no matter how old your home is. If you’re not used to paying for repairs, it can be a real shock how much you’ll need to pay to repair plumbing, HVAC, roofing, and other issues that will naturally come up as the home ages. Experts advise to plan for spending 1% to 4% of the value of your home each year in maintenance costs.
• Commuting costs. If you’re moving to the suburbs or an area where public transportation isn’t readily available, your commuting costs may increase substantially. Be sure to factor these into your budget before taking on a mortgage payment.
• Appraisal fee. The lender will assess the value of the new property for a fee, usually between $300 and $500.
• Home inspection fee. Home inspections ensure properties are structurally sound and there are no underlying issues with the home that might deter a potential buyer. Home inspections cost between $250 and $400 on average.
Tips When You Can’t Afford the House You Want
Let’s say you don’t qualify for a mortgage sufficient to buy a home in your desired area. Don’t give up: There are some things you can do to keep moving toward homeownership.
Look for Programs Specifically for Low-Income Households
You may qualify for down payment assistance, grants, or programs designed for low-income households. Self-help build programs, which allow you to build equity by making improvements to the house, also subsidize the interest rate on your mortgage or offer a longer term on your loan. This can help make the monthly payment match your budget. A Housing and Urban Development (HUD) counselor may be able to point you in the direction of programs in your area.
It’s not uncommon to see a cosigner alongside a mortgage applicant. A cosigner is responsible for the mortgage if the primary borrower is unable to pay. They must have a credit score above 670 and show they have sufficient income to make payments on the loan if the original borrower defaults. If you’re sure you’re able to make the mortgage payment, a cosigner could be just what you need to become qualified.
Increase Your Income
Sure, it’s easier said than done to increase your income. However, negotiating a pay raise, finding higher-paying work, or taking on a side hustle could help the income equation on your mortgage application.
Consider a Different Area
Rural locations tend to be much more affordable. Choose a qualified rural area, and you could finance a home with a zero-down United States Department of Agriculture (USDA) loan. You’ll have to weigh the benefits of cheaper housing against living farther from family support and possibly fewer available job opportunities. If rural life isn’t for you, explore local housing market trends in cities if you are considering an out-of-state move.
Reduce Your Debt
If debt is preventing you from qualifying for a mortgage and your top goal is to get into a home, a laser-like focus on paying off your debt can help. Try using any “bonus” money — your tax refund, birthday cash — to pay it down. Above all, make a solid, strategic plan to pay off debt (and get your partner on board).
Look for Low-Down-Payment Mortgages
Many conventional lenders (banks, credit unions, etc.) accept a 3% down payment if you meet specific requirements. Some requirements include a DTI of less than 43% and a credit score of 640 or above. FHA loans require as little as 3.5% down, whereas VA loans have no down-payment requirements. If you haven’t saved much cash, a loan with lower down-payment requirements can help you qualify for a mortgage.
Ask for Down Payment Gifts
Requesting down payment gifts from close relatives may ease the financial burden of buying a home. However, conventional loans may require you to use some of your own funds to qualify for a mortgage. Remember, you can also use some gift money to pay for closing costs or other housing expenses.
Take a Retirement Account Withdrawal or Loan
If you need extra cash for a down payment, consider taking a traditional IRA withdrawal or a 401(k) loan. Traditional and Roth IRA rules state that those who haven’t owned a primary home in the previous two years can withdraw up to $10,000 for a down payment without paying the 10% early distribution penalty. And if you have a 401(k), your employer may allow loans. This means that you can borrow money against your 401(k) for a home. However, you must pay interest and usually pay back the principal within five years.
Consider Whether Buying a Home Makes Sense
If you’ve exhausted your options and still can’t seem to make the numbers work on a home purchase, it’s time to refresh your memory as to the advantages of renting. Focus on paying down debt and stop trolling real estate websites for a while. You’ll emerge from your home-buying hiatus refreshed and ready to make the next move.
The Takeaway
Once you have a good sense of how much house you can afford, the next step is to start the process of securing a home mortgage loan. Getting prequalified for a loan will help you understand if your vision of what you might borrow aligns with a lender’s assessment.
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.
SoFi Mortgages: simple, smart, and so affordable.
FAQ
Why use a home affordability calculator?
A home affordability calculator can help you identify how much house you can afford, and determine a mortgage payment that fits within your budget. This way, you can be confident that you won’t ever feel “house poor.”
How much do I need to make to buy a $450K house?
A salary between $135,000 and $140,000 will help you afford a 450k home. But of course, affordability will also depend on your down payment and other financial factors like your credit score and debt-to-income ratio.
Is $50,000 enough for a down payment on a house?
Yes. Generally, you need a 3% to 20% down payment to purchase a home, depending on the type of loan. So, if your lender requires a 20% down payment, $50,000 will help you qualify for up to a $250,000 loan.
How many times my income can I afford in a house?
Aim to buy a house that equals about three times your yearly income. If you have no other debts, you can probably spend more than this. This calculation may not work for every situation and housing market. A mortgage lender can help with your unique situation.
What is the mortgage on a $500K house?
For a conventional loan with a 20% down payment and an interest rate of 5%, the payment for a $500K house would be $2,147 for principal and interest. What you may actually pay would depend on your specific interest rate, down payment, and loan type.
How much house can I afford if I make $100,000?
Assuming you’ve set aside $20,000 for a down payment and don’t have a lot of other debts to pay, you should be able to afford a house that costs around $200,000. Your monthly mortgage payment on a loan with an interest rate of 5% would be about $1,350. A mortgage calculator can help you get closer to your specific house budget.
How much money do you need to save for a house?
The typical first-time homebuyer makes a down payment of seven percent of the purchase price, according to the National Association of Realtors. So if you were buying a $250,000 home, you would need to have $17,500 saved. You’ll also want a cushion of money to cover closing costs, moving expenses, new furniture, or other one-time costs associated with your move.
Is it worth saving 20% for a house?
Being able to put down 20% will help you qualify for a favorable mortgage rate and loan terms, but if you don’t have 20% and can still make the monthly mortgage payments, many lenders will help you finance your purchase for less than 20% down — some as low as 3%.
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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.
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Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
*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.
