What Mortgage Can You Get With 50k Salary? 

What Mortgage Can You Get With 50k Salary 

Buying a house involves a lot of serious decision-making.

But one of the first things you want to know is what house you can get with your earnings.

So, let’s say you make $50k a year.  What mortgage can you get with a 50k salary?

Unfortunately, the answer to this question isn’t as simple as how much money you make each month.

We explain all the factors that determine the type of property that you can afford on a 50k salary and throw in some top tips on how to boost your affordability.

Factors that affect how much house you can afford


The first thing mortgage lenders will look at is your gross monthly income. This is the amount of money you earn before any taxes or deductions.

The good news is that all types of income are taken into account, including:

·       Monthly wages

·       Overtime

·       Commission

·       Bonuses

·       Self-employment income from side hustles

·       Income from rental properties

·       Benefits such as disability or social security income

·       Chid support

Ultimately, a mortgage lender’s decision is based on a loan-to-income ratio. This is where the amount that you want to borrow is divided by your earnings. Typically, the most you can borrow is approximately three to four times your annual salary.

But this is just an estimate, and as we go on to explain, other things may affect what you can borrow.


Mortgage lenders have a responsibility to ensure that borrowers can afford the monthly payment of a loan, which means not only looking at a person’s income but also their outgoings.

General expenditures such as grocery bills, utility bills and other monthly direct debits will be taken into consideration when assessing affordability. Some outgoings such as school fees, pension contributions and private healthcare costs may be ignored by your lender so it’s always worth checking what they include when deciding whether you can afford a mortgage or not.


It’s possible to get approved for a mortgage if you have debt, but it significantly affects how much you can borrow.

This is because it can hinder your ability to make repayments to your mortgage lender.

Monthly debt payments can include:

·       Credit cards

·       Student loans

·       Car finance

·       Catalogue or store loans

·       Cell phone contracts

Now we know that debt is taken into consideration when applying for a mortgage, let’s look at how it affects the numbers.

Example 1 – a home buyer makes $50k a year and has no existing debt. If this person secured a 3.75% fixed interest rate loan over 30 years with a 3% down payment, they could afford a property worth up to $270k.

Example 2 –  this home buyer also makes $50k annually, but has monthly debts that total $500. Based on the same loan terms as example 1, homeowner two may only be approved for a mortgage of up to $180k with a 3% down payment.

You can see from the examples above how much debt reduces your affordability.

Credit score

Your credit score will determine your choice of lenders and how likely it is that your application will be approved.

There is no magic number that you need your credit score to be before applying for a mortgage, but it does have to be good. A good score means that you have demonstrated in the past that you have borrowed money and paid it back on time, as per the agreement of your loan. This tells the lender that you’re a responsible borrower and have a solid financial history.

Late or missed payments and too many lines of credit are factors that can reduce your likelihood of getting accepted for a mortgage application. But staying too close to your credit, regularly applying for credit and having no credit history can be just as damaging.

Each lender will have their own criteria for what they define as a good or bad credit score, but keep in mind that factors such as age and income can affect a lender’s decision as well.

Your credit score can also impact the mortgage interest rate that you get offered. This means that you could end up paying more money over the full term of your mortgage compared to someone who has a better credit score and was offered a lower interest rate. Whilst the difference between a 3% and 3.5% rate may not seem a lot, over a 30-year term this is a significant amount of money.

To summarise, a good credit score is needed to prove to lenders that you will pay their money back and secure the best interest rate possible.

Down payment

The average down payment for properties in America is approximately 6% of the loan value. However, it’s possible to buy a home with as little as 3% down depending on your type of loan and credit score

Put simply, the more money you have to put on a down payment for a house, the less you will need to get approved to borrow. The smaller your loan, the smaller your monthly repayments will be too.

A large down payment also gives you access to more competitive mortgage deals and interest rates, saving you money in the long term.

Future changes

Whilst mortgage lenders can’t predict what will happen in your future, they do have to consider whether events such as being made redundant or having a baby will affect your ability to make the monthly mortgage payment.

If a lender thinks you may struggle in these situations, they may decide to reduce how much you can borrow.

Planning ahead could strengthen your application. For example, having savings that will cover at least three months’ outgoings, including your mortgage repayments and monthly expenses to protect yourself against future changes.

So, what mortgage can you get with 50k salary?

Based on a 50k salary and assuming you have no other debts, a good credit score and a sizeable down payment – you may be able to get a loan for a property worth between $180k and $250k based on a 30-year loan term and 3.75% fixed-rate loan.

How to find out what mortgage can you get with 50k salary

1.       Use a mortgage affordability calculator

Mortgage calculators are a great way to get an idea of how much you could borrow without affecting your credit score.

To use an online mortgage calculator, you will need the following information:

·       Property value

·       Your deposit contribution

·       How many years you would like to take the loan out for (e.g 30 years)

·       Interest rate

Using this helpful tool will give you access to several benefits, including:

Giving you an understanding of how mortgages work – it can be quite daunting to apply for a mortgage for the first time. You may come across terms that you’ve never heard of before. A mortgage calculator tool shows you how mortgages work and the criteria that lenders use, giving you a better understanding of the process.

Helping with budget planning – mortgage calculators give you a quick decision on whether you have saved enough money or earned enough money to afford a property. If the calculator states that you can’t afford to buy a particular house, you will be able to work out from the information it gives you how much you need to save in order to afford it.

Saving you money – a mortgage calculator shows you the number of different interest rates and types of mortgage loans available to you. You may come across a product that is more appealing financially but requires you to save for a bigger down payment. This will save you money in the long term.

Saving you time and effort – an online mortgage calculator is quick to use and quick to give you a decision in terms of what you could afford to borrow. There’s no need to meet with mortgage professionals until you’re sure that you have a chance of qualifying for a mortgage.

2.       Use comparison sites

Comparison sites are a great starting point when searching for a mortgage. They will give you an indication of the types of mortgage you could get based on your financial situation (earnings, outgoings and deposit). However, there are some things to be aware of when using comparison sites for mortgages.

·       Comparison sites only show a certain number of products that are available to you. This means that you won’t necessarily be getting the best deal.

·       Sponsored links are a way for comparison sites to make money. This means that the best deals for you may not appear at the top of the search results, just the ones that will earn the company money if you click through to the lender’s website.

·       There are often hidden fees and additional clauses that are not clearly displayed on comparison site websites. Make sure you read the small print before purchasing a product.

·       Not every lender uses comparison sites, so you may miss out on a good deal by only relying on the search results online.

Using a comparison tool is beneficial, but it’s a good idea to speak to a mortgage broker as well once you get an idea of roughly how much house you can afford on your salary.

3.       Get a mortgage in principle

The only way to find out for definite what you can afford is to get a mortgage agreed in principle by a lender. This is almost like a practice run for a real mortgage application. You will still need to go through the mortgage offer process after getting a mortgage in principle.

For lenders to provide you with a mortgage in principle you will need to provide:

·       Personal details such as name, address and date of birth

·       Income

·       Monthly expenses

·       Deposit

It’s a relatively quick process because you don’t need to provide any documentation or proof at this stage. They are normally valid for up to 90 days if you decide to apply for a deal that you’ve been offered in principle. A mortgage in principle may affect your credit score, depending on whether the lender is running the agreement as a hard or soft credit check.  Check with your lender which method they will use first.

Tips to boost your house affordability

The process of saving for and owning your own property can feel like it takes a very long time. But there are some ways that you can improve your affordability, allowing you to pick up those special set of keys sooner.

Pay off debt

Focus on paying off your highest interest debt first. This may be car finance or credit card payments, depending on the terms of your agreements. Cut back on your spending to avoid adding to your debt. The more you can clear your debts before applying for a mortgage, the more you will be allowed to borrow.

Save for a bigger down payment

Ok, so you might be desperate to get on the property ladder as soon as possible but there are benefits to waiting a bit longer and saving a bit harder. If you’re unable to save any more money yourself, consider the following options.

Loans from parents or family

If you’re lucky enough to have family members that want to help you get on the property ladder, this could be a good way to gather enough cash for your down payment. Whether it’s a gift or an informal loan, it could be the difference between you getting approved for a house or not.

Buying with someone else

If borrowing from family isn’t an option, you may want to consider buying a property with a partner or friends so you can raise enough money for your deposit. It’s important to get legal advice on writing up a contract so each party knows where they stand if one half of the property owner wants to sell their share in the future.

Improve your credit score

Before applying for a mortgage, check your credit score so there won’t be any hidden surprises. If your score is low, there are ways to improve it over a short period of time.

·       Pay more than the minimum payments on outstanding debt.

·       Ask your credit card provider to increase the limit.

·       Check and resolve any credit report errors.

·       Enquire about having negative entries removed if they have been paid off.

Don’t make too many mortgage applications

If your first mortgage application gets rejected, don’t be tempted to apply for one with a different lender straight away. Doing so can damage your credit score and impact how much you can borrow next time you apply. Instead, ask your lender to explain the reason your application was rejected. Once you know this, you can resolve any issues that may affect future applications.

Get extra help with a government program

There are a few government schemes for first-time buyers that will help you fund your home by making it more affordable.

Federal Housing Administration (FHA) loans – this government-backed scheme provides loans that require a lower minimum credit score and down payment, making them a popular option for first-time buyers.

Department of Housing and Urban Development  (HUD) homes – when homeowners are unable to pay their FHA loans, HUD becomes the owner of the property as part of the FHA loan program. Buyers with a low income are then given the opportunity to buy the house at a lower rate.  

Regular homeowner costs

Your 50k salary will also need to cover future monthly homeowner costs.  

Let’s take a look at what these costs might look like.

Mortgage repayments – your monthly repayments are normally set over a 15 or 30-year term. They will also include the interest rate that was determined in your mortgage application.

Homeowners insurance – most mortgage lenders require you to have homeowners or mortgage insurance to pay for repairs to the house if it gets damaged due to theft or a natural disaster. As a property owner, you will also want to protect the contents of your home for the same reasons.

Property tax – in America, property taxes are based on how much your house is worth. The rate is typically between 0.2-1.9% depending on which state you live in. Property tax is normally paid in one or two installments.

Home maintenance – even new build houses will need maintenance at some point. It’s a good idea to factor household maintenance costs into your annual household budget. Investing in the upkeep of your property will also protect its value if you decide to resell.

Buying a house on a 50k salary

To summarise, the type of house you can afford will depend on three things: your income, existing debt/outgoings and your down payment. So the type of house you can buy with a 50k salary will take all of those factors into account.

It is possible to boost your affordability with the tips described in this article though, so don’t get disheartened if an online mortgage calculator or mortgage in principle doesn’t give you the answers you were hoping for.

To learn more about the cost of home ownership, check out the dedicated home ownership section on our personal finance blog.

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