How much house can i afford on 50k

How Much House Can I Afford With 50k Salary?

A salary of $50,000 per year might not sound like much, but you’d be surprised how much house you can afford with that income.

That’s about how much my wife and I made combined when I bought my first house at age 26.

That home was $250,000. Granted, I had decent credit and very low debts, so that certainly helped. 

Let’s go over some various situations and how much you might be able to afford.


If you have low debts, good credit, and are using an FHA loan, you may qualify for a home up to around $240,000 at today’s interest rates.

Keep in mind that there are many factors that affect this number, including property taxes, homeowner’s insurance, whether the home is in an HOA, your credit score, and more. Apply with a lender to find your maximum home price.

Monthly debts are a huge factor

First things first: if you want to afford more home on a $50k salary, you want to pay off debts.

For instance, a $500-per-month auto loan diminishes your home buying power by around $70,000 at this income.

That’s because the maximum a lender can approve you for is 46.9% of your gross (before tax) income on housing and 56.9% on housing plus all other monthly debt payments. And that’s only if you’re using an FHA loan and the lender runs it through an automated underwriting system.

In mortgage speak, that’s a 46.9% front-end debt-to-income (DTI) ratio and a 56.9% back-end ratio; ratios this high are only available on FHA loans.

But to be safe, let’s shoot for a 40% front-end DTI and 50% back-end for the example below.

Annual incomeMonthly all-inclusive paymentAuto loan, student loan payments etc.Home price

*Assumes an FHA loan at 3.5% down and 6% interest rate, $200/mo property taxes and $50/mo insurance, no HOA. Your rate and costs will vary.

The difference between $100 and $300 in debts doesn’t do much because your back-end ratio is under 50% either way. But higher debts really eat into your buying power because you start bumping up against that back-end ratio.

Consider an adjustable-rate mortgage to increase buying power

You already know this, but your mortgage rate affects your buying power dramatically.

When rates shot from 3% to 6% in a few months in early 2022, it did a real number on homebuyers.

However, there is a secret weapon: an adjustable-rate mortgage, or ARM.

ARMs aren’t for everyone. They come with risks, like rising rates in the future. But if you think you might sell the home or refinance within 5-7 years, it’s worth considering. 

As of this writing, mortgage agency Freddie Mac says ARM rates are 1.25% below 30-year fixed rates. Let’s see how that affects buying power.

Fixed Rate5-year ARM
Monthly debts$250250
All-inclusive home payment$1,800$1,800
Front/back DTI40/4540/45
Max home price$215,000$245,000

*Example rates only. Your rate will vary. Assumes FHA loan at 3.5% down.

In this case, choosing an ARM increases buying power by $30,000 and could help the buyer afford a bigger home or one that will suit them better.

Affordability by DTI

Many buyers don’t want to “push” their DTI so high that they can’t afford their payments. If you have good credit, you can actually get approved for more house than you can comfortably afford.

Some finance gurus recommend spending only 25% of your take-home pay on your house payment. I don’t think that’s realistic in most markets.

In my humble opinion, using 30-40% of your gross salary is a good benchmark to shoot for. 

Monthly Income$4167
Less 15% taxes*-$625
House payment at 40% front-end DTI-$1,660
Remaining for expenses$1,880

*As a homeowner, you have a huge home mortgage interest write-off each year. Work with your CPA and employer to see if you can reduce the amount of taxes withheld from your paychecks. Personally, I only paid about 10% in taxes each year at this income level due to heavy mortgage interest and other deductions.

Even though I think it’s okay to use 40% of gross income for your house payment, some may not be comfortable with that.

Here’s what you might afford at different debt-to-income levels.

25% DTI30% DTI40% DTI45% DTI
Monthly debts$300$300$300300
All-inclusive home payment$1,040$1,250$1,660$1,875
Back-end (all debts) DTI32%37%47%52%
Max home price$125,000$155,000$215,000$240,000

*Rate is for example purposes only. Scenarios assume an FHA loan at 3.5% down, $200/mo taxes and $50/mo insurance, no HOA.

“Push it as far as you can go”

Being comfortable with a higher DTI is one of your most effective ways of buying more home with your salary. 

One of the best pieces of advice I ever received was from my realtor when I purchased my first home. He told me to “push it as far as you can go” when qualifying for a home.

It sounded risky and I thought it was just a sales tactic. But he was right. The home skyrocketed in value by $90,000 in three years. That wouldn’t have happened if I settled for a cheaper condo, townhome or lower-quality house. 

A more ideal home will last longer. You won’t have to sell and buy again as often, which costs about 10% of your home’s value each time.

Don’t do anything you’re not comfortable with, but don’t be afraid to “push” what’s comfortable for you to get a better home.

Ways to increase your buying power

Here are strategies if you’re struggling to afford a home at $50k salary

Don’t buy a home in an HOA. Homeowner association dues can be hundreds of dollars per month. Dues add to your DTI which limits your buying power.

Make a bigger down payment or get gift funds. The lower your mortgage balance, the lower your payment will be.

Use an FHA loan. These tend to be most lenient on debt-to-income ratios. Conventional loans limit you to about 45% DTI including all debts and housing payment (50% in select cases). FHA’s max is 46.9% front-end DTI and 56.9% back-end.


How much house can I afford with 50k salary?

Depending on your existing debts, you may be able to afford a home between $130,000 and $240,000 at today’s interest rates. Your exact amount depends on your debts, property taxes, homeowner’s insurance, HOA dues, loan program, and payment comfort level.

Should I pay off debt before I buy a home?

Reducing your debt payments by $500 per month can increase your maximum home price by about $70,000. Paying off debt will help you qualify for a better home that will suit your needs longer.

Do you need good credit to buy a home at $50k salary?

An FHA loan requires just a 580 score and allows for high debt-to-income ratios. However, a higher credit score will help you qualify for a higher-priced home.

$50,000 income isn’t too low to buy a house.

You may have been told that you can’t afford a home on $50,000 per year. But if you’re creative and are committed to becoming a homeowner, you can very likely make it happen.

It’s time to take that first step. Leave a comment below if I can help.


  • Tim Lucas

    Tim Lucas spent 11 years in the mortgage industry helping everyone from first-time buyers to experienced investors. He purchased his first home at 26 with just $1,100 out-of-pocket and now owns real estate worth $2.4 million. Tim was the managing editor at national websites and and has been featured in publications such as Time, U.S. News, MSN, and more. Connect with Tim on LinkedIn, Twitter, and TikTok.