How Much House Can You Afford If You Make $48k–$50k a Year?

Michael Warford's PhotoJaime Dunaway-Seale's Photo
By Michael Warford & Jaime Dunaway-Seale Updated October 29, 2024
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Jaime Dunaway-Seale's Photo
Edited by Cara Haynes

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It's possible to afford a house worth $149,000–$212,000 on a $48,000–$50,000 a year salary. If you make $4,000–$4,167 a month and owe less than $320–$333 in monthly debt, you can afford a $1,120–$1,167 monthly mortgage payment. 

Factors such as how much debt you have, how good your credit is, the size of your down payment, and your interest rate will drastically determine what you can afford. The best play is to run through your numbers with a loan officer and talk with a local real estate agent to help you find a home in your price range.

🔑 Key takeaways:

  • You may be able to afford up to a $212,000 home on a $48–$50k salary.
  • You can afford to spend about $1,120–$1,167 on a monthly mortgage payment.
  • Your monthly mortgage payment and your monthly debt payments combined shouldn't exceed $1,440–$1,500.

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How much house you can afford on $48k–$50k per year

The size of your down payment has a big impact on what you can afford. The more money you put down up front, the less you have to finance. That results in lower payments each month.

Traditionally, a standard down payment is 20% of the purchase price. Put down less than that, and you'll likely have to pay private mortgage insurance (PMI), which protects the lender if you default on your loan. PMI usually equals 1% of your home's price each year, and you'll pay it monthly until you have at least 20% equity.

Here’s how much house you can afford depending on the size of your down payment.

SalaryMonthly paymentDown paymentHow much house you can afford
$48,000–$50,000$1,120–$1,167$4,440–$4,650 (~3%)$148,000–$155,000
$48,000–$50,000$1,120–$1,167$15,700–$16,400 (~10%)$157,000–$164,000
$48,000–$50,000$1,120–$1,167$40,800–$42,400 (~20%)$204,000–$212,000
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Assumes 6.32% fixed-rate interest on a 30-year loan, 0.525% property taxes, 1% PMI for down payment below 20%, and no monthly debt.

Providing a small down payment permits you to buy a home sooner. Less money up front also allows you to save for home maintenance and repairs.

Certain loan programs from the Federal Housing Administration (FHA), the U.S. Department of Agriculture (USDA), and the U.S. Department of Veterans Affairs (VA) require as little as 3.5% down — or no down payment at all.

The drawback is that a low down payment leaves you with a large outstanding balance on your loan, so you'll pay more in overall interest.

If you just can't swing a large down payment, your state may have assistance programs for first-time buyers.

Mortgage affordability calculator

Determine your maximum monthly mortgage

Your gross monthly income is what you earn before taxes. If you make $48,000–$50,000 a year, divide by 12 to get your gross monthly income — $4,000–$4,167. Financial experts and lenders recommend spending no more than 28% of your gross monthly income on a mortgage and no more than 36% on total debt.

To calculate how much should go toward housing, multiply your gross monthly income by 0.28. On a $48,000–$50,000 income, your monthly mortgage payment should be no more than $1,120–$1,167.

Figuring how much you should spend on debt is similar. Multiply your gross monthly income by 0.36. That’ll give you a maximum monthly debt spend of $1,440–$1,500 for an income of $48,000–$50,000.

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How debt affects how much house you can afford

Lenders will take into account your debt-to-income ratio (DTI) when reviewing your mortgage application. DTI is the percentage of gross monthly income spent on repaying money you owe, such as for mortgages, student loans, credit cards, and car payments. Your DTI shows lenders if you are capable of assuming more debt.

A healthy DTI is 36% or below. Anything above that will be considered risky and subject to higher interest rates. Although you can still get a mortgage with a high DTI ratio, most lenders will not extend a line of credit to anyone with a DTI exceeding 41–43%.[1]

To calculate your DTI, add all the debt you owe each month. Then divide the sum by your gross monthly income and multiply by 100.

As you can see below, if you make $48,000–$50,000 a year and adhere to the 28/36 rule, you shouldn't spend more than $1,440–$1,500 per month on debt. If you have the maximum qualifying debt ratio of 43%, the most you could spend on debt is $1,720–$1,792 — although we don't recommend this.

SalaryMonthly mortgageMonthly debtTotal monthly debtDTI
$48,000–$50,000$1,120–$1,167$320–$333$1,440–$1,50036%
$48,000–$50,000$1,120–$1,167$520–$541$1,640–$1,70841%
$48,000–$50,000$1,120–$1,167$600–$625$1,720–$1,79243%
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Even if you technically qualify for a loan, it's never a good idea to push your budget to the max. Before buying a house, consider paying off some of your debt to lower your DTI, whether that’s auto loans, credit card debt, student loans, or something else.

In the following table, you can see how lowering your monthly non-mortgage debt can free up your budget for a more expensive home while still maintaining a DTI of 36%. If you were making $50,000 per year, then you could afford a home worth $212,000 if you had monthly debt of under $333, but only a home worth $160,000 if your monthly debt is $620.

SalaryMonthly debtMonthly mortgage paymentHow much house you can afford
$48,000–$50,000$0–$333$1,120–$1,167$204,000–$212,000
$48,000–$50,000$420$1,020–$1,080$186,000–$197,000
$48,000–$50,000$520$920–$980$167,000–$178,000
$48,000–$50,000$620$820–$880$149,000–$160,000
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Assumes 20% down payment on a 30-year loan with 6.32% fixed-rate interest and 0.525% property taxes.

Credit score

A credit score evaluates your credit risk and shows lenders if you have a proven track record of paying your debts back on time. A good score is essential to qualifying for a mortgage and getting the best interest rate.

Scores range from 300–850, with most conventional loans requiring a score of at least 620. The higher your number, the more confident lenders will feel giving you money, increasing how much you can borrow.

Credit scores are generally graded on this scale:

  • Excellent: 800–850
  • Very good: 740–799
  • Good: 670–739
  • Fair: 580–669
  • Poor: 579 or below

Low-credit loans make buying a home with bad credit possible. But you'll likely end up with a steep interest rate, costing you more each month and over the course of your loan.

How to afford more home on $48k–$50k a year

Here’s how you can maximize the amount of real estate that $48,000–$50,000 can get you.

Reduce your principal

Principal is the remaining balance on your loan after your down payment. If you pay $50,000 up front on a $260,000 home, your principal is $210,000.

One of the best ways to qualify for a bigger mortgage is to provide a large down payment because it reduces your principal.

Determining how much principal you'll pay each month isn't as simple as dividing the balance by the number of months left in the loan. Early on, most of your payment goes toward interest, with only only a small portion going toward the principal balance.

That's because interest is based upon the current outstanding balance. Once you pay back some of what is owed, you'll pay less in interest and more in principal.

If you're able, making additional mortgage payments early will allow you to build equity faster, leading to fewer payments and more savings.

Where are the most affordable cities to buy a home?

The most affordable cities to buy a home are in the South and Midwest. For example, in McAllen, Texas, the average home value is roughly $185,120 with an estimated monthly mortgage payment of about $887.91. For someone making $48,000–$50,000 a year, that's about in line with the recommended 28%. The farther north, east, and west you go, the more expensive it is to buy a home.

Shop around for a lower interest rate

A high interest rate will drive up your monthly payment, while a low interest rate will bring it down. Getting a lower interest rate can help you afford a larger home. The average interest rate changes every day, but it's currently hovering around 6%.[2] If you get a fixed-rate mortgage — and most people do — your rate will always stay the same.

A riskier option is an adjustable-rate mortgage. It initially comes with low rates, but if the rate rises over time, so will your monthly payment. However, if rates fall, then so will your mortgage payments.

How much interest you pay will also depend on the length of your loan. Loans with shorter terms usually have lower total interest costs but higher monthly payments.

Some government-backed loans, like US Department of Agriculture (USDA), Federal Housing Administration (FHA), and Veterans Affairs (VA) loans come with low interest rates for eligible borrowers. Ask your lender if you qualify for those options.

Move to an area with low property taxes

Property taxes are often bundled into your monthly mortgage payment. Depending on where you live, they can have a big impact on your monthly housing expenses. If you’re able to do so, moving to an area with low property taxes will enable you to afford more home.

The annual bill is based on your home's estimated value and the tax rate set by your local government. What you pay will largely depend on whether you live in a low- or high-tax area.

Monthly tax payments are typically held in an escrow account set up by your lender. When the annual bill is due, the lender will pay the government on your behalf.

Lower your home insurance premiums

Home insurance premiums are also wrapped into your monthly mortgage payments. You can try to lower your home insurance premiums through a variety of ways. Improving your home’s security and condition, for example, can help.

Where you choose to live also makes a big difference. States prone to natural disasters — like Oklahoma, Louisiana, and California — will have some of the highest premiums.

Homeowners in metropolitan areas may also pay more in home insurance because of higher home values and crime rates. If several of your neighbors file claims because of an uptick in crime, everyone's rate could go up.

Remodeling your kitchen or building an addition can also cause a spike in rates, as your home will now cost more to replace if you file a claim.

Shop several insurance companies each year to make sure you're getting the best rate.

Don't forget about closing costs

When deciding how much house you can afford, don't forget to factor closing costs into your budget.

Closing costs are typically 3–5% of the purchase price and include fees paid to various third parties for the appraisal, inspection, title insurance, and other mortgage-related expenses.

Along with your down payment, these costs should be added to the out-of-pocket cash you'll need on closing day.

If you're buying a $260,000 house, expect to pay between $7,800–$13,000 in closing costs.

Final take: Can you really afford a home on $48k–$50k per year?

Like we established, it is possible to afford a home of around $149,000–$212,000 on $48,000–$50,000 a year, but home costs don’t stop at the purchase price.

Think about your budget and ask yourself these questions.

  • Do you have enough cash saved for a down payment and closing costs?
  • Will you have enough cash leftover as an emergency fund to pay for repairs or your mortgage if you lose your source of income?
  • Will your monthly mortgage payment be more than 28% of your gross monthly income?
  • Do you have debts that you need to pay off first?
  • Are you comfortable paying a mortgage or will it stretch you financially?
  • Did you factor monthly utility costs into your budget?

Lenders may qualify you for a loan larger than your budget, but stick to what you know you can afford. Consider homes in the middle of your price range so you won't be strapped for cash. You'll have peace of mind knowing you can splurge on a renovation or have cash reserves in an emergency.

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Article Sources

[1] Consumer Financial Protection Bureau – "What is a debt-to-income ratio?".
[2] Freddie Mac – "Mortgage Rates".

Authors & Editorial History

Our experts continually research, evaluate, and monitor real estate companies and industry trends. We update our articles when new information becomes available.

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