How Much House Can I Afford with a $50k Salary?
Earning $50,000 a year puts you in a position to buy a home, but the exact amount depends heavily on your existing debts and interest rates. This guide explains the math lenders use to qualify you.
1. The 28% Rule (Front-End Ratio)
Most lenders suggest that your monthly housing payment (Principal, Interest, Taxes, Insurance) should not exceed 28% of your gross monthly income.
The Math for $50k:
- Annual Income: $50,000
- Monthly Income: $4,166 ($50k รท 12)
- Max Housing Payment (28%): $1,166 per month
2. The 36% Rule (Back-End Ratio)
This rule states that your total monthly debt payments (housing + cars + credit cards + student loans) should not exceed 36% of your gross income.
The Math for $50k:
- Total Allowable Debt (36%): $1,500 per month
- If you have a $400 car payment and $100 student loan payment ($500 total)...
- Max Housing Payment Remaining: $1,000 per month ($1,500 - $500)
3. What Home Price Does This Buy?
A monthly payment of $1,000 - $1,166 translates to different home prices depending on your down payment and interest rate. To get a customized estimate based on your specific debts, use our Affordability Calculator.