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If you earn a minimum of $180,000 a year, you may be able to afford a $600,000 mortgage — as long as you don’t have any other significant debts. But the exact amount you may qualify to borrow — even if you’re in that income range or higher — may also depend on several other variables, including your credit score and down payment.

Read on for a look at how much income may be needed for a $600,000 mortgage, how income fits into the overall mortgage equation, and how lenders typically determine the mortgage amount a homebuyer can handle.

What Income Is Needed to Get a $600,000 Mortgage?

You might think the loan amount you’ll receive when you apply for a mortgage will be based mostly on your household income. But income is just one of several factors lenders generally consider when deciding how much someone can borrow.

The home mortgage loan a borrower can qualify for usually is based on how much the lender believes that person can reliably pay back. So the loan company will run your financials through a few different checks and calculations to come up with that number. Here are a few things lenders may look at when you apply:

Reliability of Income

Be prepared to be asked not only about your income but also how long you’ve had your job (or your business if you’re self-employed). When it comes to your income, if you want to get an idea of where you stand before you apply for a mortgage, an online home affordability calculator can help you estimate whether your income is high enough to afford a $600,000 loan. Or you might try prequalifying with one or more lenders.

Creditworthiness

Lenders will also check your credit score and credit reports to ensure that you’re financially responsible and pay your bills on time.

Down Payment Amount

Contrary to what many people believe, a 20% down payment isn’t required to get a home loan. First-time homebuyers may be able to put as little as 3% down with some lenders, or even less, depending on the type of mortgage they get. A larger down payment can help you lower your monthly payments, however, and it can show lenders you’re serious about your investment.

Debt-to-Income (DTI) Ratio

You can also expect lenders to compare your monthly gross income to your existing monthly debts (such as credit cards and student loans) to help assess if you’ll be able to manage all your payments. This calculation is called your debt-to-income ratio. (DTI = monthly debts ÷ gross monthly income.)

What Is a Good Debt-to-Income Ratio?

The Consumer Financial Protection Bureau (CFPB) advises homeowners to work toward maintaining a DTI ratio of 36% or less. And in general, that’s the number mortgage lenders are looking for, as well. But some lenders may accept a DTI ratio of up to 43% — or even higher if the borrower can meet other criteria on certain types of loans.

What Other Factors Are Mortgage Lenders Looking For?

Here are a few formulas your lender — and you — may use to determine how much house you can afford on your income.

The 28/36 Rule

The 28/36 rule combines two factors that lenders typically look at to determine home affordability: income and debt. The first number sets a limit of 28% of gross income as a homebuyer’s maximum total mortgage payment, including principal, interest, taxes, and insurance. The second number limits the mortgage payment plus any other debts to no more than 36% of gross income.

For example: If your gross annual income is $180,000, that’s $15,000 per month. So with the 28/36 rule, you could aim for a monthly mortgage payment of about $4,200 — as long as your total monthly debt (your mortgage payment plus car payment, credit cards, etc.) isn’t more than $7,200. With disciplined budgeting, you may be able to afford a $600,000 mortgage at this income level.

The 35/45 Model

Another calculation lenders might look at is the 35/45 method, which recommends spending no more than 35% of your gross income on your mortgage and debt, and no more than 45% of your after-tax income on your mortgage and debt.

For example: Let’s say your gross monthly income is $20,000 and your after-tax income is about $15,000. In this scenario, you might spend between $6,750 and $7,000 per month on your debt payments and mortgage combined. This calculation allows you to spend a bit more on your mortgage payment… as long as you aren’t carrying a heavy debt load.

The 25% After-Tax Rule

If you’re nervous about keeping up with your monthly mortgage payments, this formula will give you a more conservative amount to shoot for. With this calculation, your target is to spend no more than 25% of your after-tax income on your mortgage.

Keep in mind that these calculations can give you only a rough estimate of how much you can borrow. If you want to be more certain about the overall price tag and monthly payments you can afford, it may be helpful to go through the mortgage preapproval process.

What Determines How Much House You Can Afford?

Here’s something else to consider when determining how much income is needed for a $600,000 mortgage: A house payment isn’t limited to just principal and interest. And the extra expenses that may be tacked on every month can add up fast. Let’s examine the costs covered by a monthly loan payment:

Principal

Principal is the original amount borrowed to buy the home. Each month, a portion of your payment will go toward paying down this amount.

Interest

Interest is the money you pay to the lender each month for giving you the loan. The interest rate you pay can be influenced by personal factors (such as the loan length you choose, your credit score, and your income) as well as prevailing rates in the market.

Homeowners Insurance

The cost of homeowners insurance (coverage that protects your home and other assets from various risks), also may be rolled into your monthly mortgage payment. Your lender will then pay this premium when it’s due.

Mortgage Insurance

Depending on the type of loan you get and the amount you put down on your home, you may be required to carry private mortgage insurance (PMI) or some other type of mortgage insurance policy. This insurance is designed to protect the mortgage lender if a borrower can’t make the agreed-upon loan payments.

Property Taxes

A portion of your monthly mortgage payment may also go toward the property taxes you’ll pay to your town or city.

Recommended: Home Loan Help Center

$600,000 Mortgage Breakdown Examples

The monthly payment on a $600,000 mortgage can vary based on several factors, including the length of the loan (usually 15, 20, or 30 years) and the interest rate. A mortgage calculator can give you a pretty good idea of what your payments might be. Here are some examples of how the payments for a $600,000 mortgage might break down.

30-Year Loan at 6.00% Fixed Interest Rate

Total Payment: $4,562

Principal and Interest: $3,597

Other Costs (estimated PMI, homeowners insurance, and property taxes): $965

15-Year Loan at 6.00% Fixed Interest Rate

Total Payment: $6,028

Principal and Interest: $5,063

Other Costs (estimated PMI, homeowners insurance, and property taxes): $965

30-Year Loan at 7.00% Fixed Interest Rate

Total Payment: $4,957

Principal and Interest: $3,992

Other Costs (estimated PMI, homeowners insurance, and property taxes): $965

15-Year Loan at 7.00% Fixed Interest Rate

Total Payment: $6,358

Principal and Interest: $5,393

Other Costs (estimated PMI, homeowners insurance, and property taxes): $965

Pros and Cons of a $600,000 Mortgage

According to Redfin, the median home sale price in the U.S. in March 2024 was $432,812. So if you can qualify for a mortgage that’s around $600,000, there’s a good chance you’ll be able to find a pretty nice home — depending on where you live.

The downside of borrowing $600,000 is that your mortgage payments could take a sizable slice out of your income every month. If you’re cutting it close and you experience an unexpected expense or temporary job loss, you may have trouble staying on track. Before moving forward with a loan of this size, you may want to speak with a financial advisor and be sure the amount fits with your budget and your other goals.

Recommended: Best Affordable Places to Live in the U.S.

How Much Will You Need for a Down Payment?

A down payment is generally between 3% and 20% of the purchase price. The amount you’ll need for a down payment will depend on the cost of the home you plan to buy and the type of mortgage loan you get.

Can You Buy a $600,000 Home with No Money Down?

You may be able to get a mortgage without making a down payment if you can qualify for a government-backed loan from the U.S. Department of Agriculture (USDA) or a VA home loan from the U.S. Department of Veterans Affairs. These loans are insured by the federal government — which means the government will help pay back the lender if the borrower defaults on the loan.

Not all lenders offer these programs, and borrowers must meet specific requirements to qualify. But if you think you may be eligible, it could be an option that’s worth looking into.

Can You Buy a $600,000 Home with a Small Down Payment?

Some private lenders will accept as little as 3% down from a first-time homebuyer on a conventional mortgage, so don’t give up if you can’t get a no-down-payment loan.

You also may want to check out the requirements for a government-backed FHA loan, which allows buyers to make a down payment as low as 3.5%. There may be a limit on how much you can borrow with an FHA loan, depending on where you buy, but the 2025 limit in higher-cost areas can be as much as $1,209,750. And in Alaska, Hawaii, Guam and the U.S. Virgin Islands, the 2024 limit is $1,724,725.

Is a $600,000 Mortgage with No Down Payment a Good Idea?

There’s no question that coming up with a down payment can be an obstacle to homeownership — especially for first-time homebuyers. And the thought of skipping that step may be appealing if it could help you get into a home faster, or allow you to hold onto your savings for renovations, an emergency fund, or other financial goals.

It’s important to remember, though, that without a down payment it can take longer to build equity in your home. And though you won’t have to pay for mortgage insurance with a no-down-payment government-backed loan, you can expect to pay an upfront funding fee for a VA loan and an upfront and annual guarantee fee for a USDA mortgage. A mortgage professional can help you weigh the pros and cons of different types of mortgage loans and determine the best move for your individual circumstances.

What If You Can’t Afford a $600,000 Mortgage Even with No Down Payment?

Here are a few steps to consider if it turns out you can’t afford the payments on a $600,000 mortgage:

Pay Off Debt

If your DTI ratio needs work, you may want to suspend your home search and concentrate on paying down recurring debts like credit cards, car payments, or a personal loan. This could allow you to put more of your monthly income toward your mortgage payments.

Build Your Credit

Checking your credit reports can give you an idea of what lenders might see when they evaluate your creditworthiness. If there are any errors, you can take steps to fix them, and if you see something negative in your reports, you can work on doing better. If you use a credit-score monitoring service, you may already know what your credit score is and if it needs a boost. Conventional lenders typically look for a minimum score of 620 to 640.

Start Budgeting

Creating a budget and trimming some expenses could help you reach your debt-payment and savings goals. Remember: If you can come up with a bigger down payment, you may be able to borrow less, keep your monthly payments to a more reasonable amount, and pay less in interest over the life of the loan.

Alternatives to Conventional Mortgage Loans

If you can’t qualify for a conventional mortgage loan, you may have some alternatives to consider. Here are a few potential options:

First-time Homebuyer Programs

As mentioned above, you may qualify for a federal, state, or local first-time homebuyer program that can help lower your down payment, closing costs, and other expenses. There may be limits on the type of home you can buy or a cap on the home’s cost. But you might find it’s worth doing some research, or asking a mortgage professional, to see if you’re eligible.

Rent-to-Own

Another option may be to enter into an agreement to rent-to-own a home. With this type of arrangement, you start out renting, but the landlord agrees to credit a portion of your monthly payment toward purchasing the home. This can be a good way to start working toward homeownership if you can’t qualify for the mortgage amount that you want. But it’s important to understand the downsides of the deal — including that you might lose money if you change your mind about buying the home, or if the landlord has second thoughts about selling.

Owner Financing

With owner financing, the person who’s selling the home may serve as the lender for all or part of the purchase price. Just as with a rent-to-own home, there are risks to this kind of agreement, but it can make homeownership possible if a traditional loan isn’t available.

Mortgage Tips

No matter how much you plan to borrow, buying a home is a big step. Here are a few things you may want to do to prepare:

Work Out Your Housing Budget

Remember, your housing costs won’t be limited to principal and interest. It’s important to determine how much you might pay for insurance, taxes, homeowners association dues, maintenance, and other expenses before you make the leap to homeownership.

Find the Mortgage that Best Suits Your Needs

This may include deciding whether you want a:

•   fixed vs. variable interest rate

•   conventional vs. government-backed loan

•   shorter vs. longer term loan

Get Preapproved

Going through the mortgage preapproval process with a lender can give you a better idea of how much you can afford to spend on a home. And having preapproval may give you an edge over other house hunters in a tight market.

The Takeaway

Obtaining a mortgage is just one of many steps in the homebuying process, but it’s an important one. Taking the time to do some research could keep you from getting in over your head — or locked into a loan that isn’t a good fit.

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

How much income do you need to qualify for a $600,000 mortgage?

If you make at least $180,000 a year, you may be able to qualify for a $600,000 mortgage, depending on how much debt you’re carrying and other variables.

How much is a $600,000 mortgage per month?

The monthly payment for a $600,000 mortgage can vary based on several factors, including the length of the loan and the interest rate. For example, a 30-year fixed-rate mortgage with a 7.00% interest rate could be $3,992 per month for principal and interest alone, while the principal and interest for a 15-year fixed-rate mortgage with a 7.00% interest rate could be $5,393 per month.

Can I afford a $600,000 house on a $100,000 salary?

It would be very difficult to keep up with the monthly payments or even qualify for a loan to buy a $600,000 house on a $100,000 salary — that is, unless you have additional income outside of your salary or make a very large down payment on the property.

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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.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

^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.
^†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.

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Most estimates suggest that you would need to make around $130,000 a year to qualify for a $400,000 mortgage. Considering that the latest average annual income is around $64,000, and the average home price was $513,100 in the first quarter of 2024, today’s homebuyers need an above-average income to purchase an average-priced home.

Let’s look at what factors lenders consider when qualifying you for a mortgage, what to do if you can’t afford a down payment, and what alternative financing sources are available.

How Much Do You Need to Make to Get a $400,000 Mortgage?

Assuming a 30-year fixed-rate mortgage loan, a down payment of 7% (on a home priced at $430,000), and an interest rate of 7.00%, you would need to earn $130,000 per year to qualify for a $400,000 mortgage. Your estimated monthly mortgage payment of $3,494 would include property taxes and insurance, among other costs. This assumes that you don’t have any other significant debts — so let’s look more closely at how debt affects your mortgage situation.

What Is a Good Debt-to-Income Ratio?

If you have significant debt payments each month, you will need to earn more to qualify for a mortgage because your ability to make payments may be compromised. Lenders look at your debt-to-income (DTI) ratio, which is the percentage of your monthly gross income that goes to paying your monthly debt payments, to determine your borrowing risk and your loan terms.

Lenders typically prefer that your DTI be no higher than 36% with no more than 28% to 35% of that debt going toward a mortgage payment. The lower your DTI, the less of a risk you are to a lender and the better your terms will be.

What Determines How Much House You Can Afford?

How much you earn is one factor that determines how much house you can afford. Two other factors that could be considered under your control are how much debt you are carrying and how much of a down payment you can afford. In addition, there are factors you cannot control, such as interest rates on the different types of mortgage loans, as well as house prices.

If you have significant debt payments each month, the required income for a $400,000 mortgage will go up. The interest rate offered by a lender will also affect your monthly mortgage payments. If the interest rate is 7.5%, you might need to earn more than if the interest rate is 7%.

The more you can afford as a down payment, the lower your monthly payment will be, particularly if you can put down 20% or more of the home’s price. This is because a down payment of less than 20% will result in the lender requiring you to have private mortgage insurance, or PMI. (Conventional loans are not insured by a government agency so PMI protects lenders if owners default.) A mortgage calculator with taxes and insurance will help you determine the monthly cost of owning a house, factoring in the extra costs.

Going through the mortgage preapproval process can help you get even closer to your specific numbers.

What Mortgage Lenders Look For

Lenders like borrowers who do not pose too much of a risk regarding paying back the loan. If you have a good credit score, minimal debt, and a steady income, you are exactly what they are looking for.

Your Credit Score

Making timely payments on any credit cards or loans that you have and not applying for new credit or debit cards around the time that you apply for a mortgage will help cultivate a credit score that lenders find attractive.

Your Debt

Lenders also look at your credit utilization ratio. This is an indicator of how much of your available credit you are currently using. The less you are using the better, and a ratio of under 30% is preferable. For example, if your credit card has a $15,000 limit, keep your balance at $4,500 or below.

Your credit report will indicate to a lender whether you have ever declared bankruptcy, or if you are an authorized user on someone else’s credit card.

Other Assets

A mortgage lender may also look at other assets, such as checking, savings, retirement accounts, stocks, and property. If you have such assets, the lender might consider you less of a risk because you have a way to pay the loan if you experience a financial emergency.

$400,000 Mortgage Breakdown Examples

Everyone’s financial situation is unique. Looking at examples of different down payments, debt levels, and interest rates from Fannie Mae’s mortgage calculator can help give you a sense of where you might fit in.

$400,000 30-year mortgage with 7% down payment and PMI and 7.00% interest

•   Principal and interest: $2,661

•   Taxes and insurance: $717

•   Private mortgage insurance: $207

•   Total monthly payment: $3,585

$400,000, 15-year mortgage with 7% down payment, and PMI, at 7.00% interest

•   Principal and interest: $3,594

•   Taxes and insurance: $717

•   Mortgage insurance: $207

•   Total monthly payment: $4,518

$400,000, 30-year mortgage with 20% down (no PMI), at 6.50% interest

•   Principal and interest: $2,427

•   Taxes and insurance: $800

•   Total monthly payment: $3,227

How Much Will You Need for a Down Payment?

Many lenders will give you the best interest rates if you can put 20% or more down on your home. However, some conventional loans have much lower down payment requirements.

The less you pay as a down payment, the higher your loan-to-value (LTV) ratio, and the greater the risk you pose to a lender. For example, if your LTV is 90%, you have put down 10%. The lender is taking on a larger proportion of the debt than if you put down 20%, and they may require you to pay private mortgage insurance (PMI) to offset the higher risk.

SoFi’s mortgage calculator shows how much you can save on your mortgage with different down payments.

Can You Buy a $400,000 Home With No Money Down?

Some mortgages require no money down for some people. For example, a VA loan through the U.S. Department of Veterans Affairs requires nothing down, as does a loan from the U.S. Department of Agriculture (USDA).

Can You Buy a $400K Home With a Small Down Payment?

Depending on your situation, you may be eligible for a government-backed loan that allows you to put down very little. Loans through the Federal Housing Administration (FHA) require as little as 3.5% down.

Is a $400,000 Mortgage With No Down Payment a Good Idea?

You will need a government-backed loan, meaning that it is insured by the federal government in case you stop paying back the loan, to get a mortgage with a zero down payment. Two examples of government-insured mortgages are those from the VA and USDA, mentioned above. Each of these types of loans have strict qualifying criteria, such as being an active-duty service member, veteran, reservist, or a surviving spouse for a VA loan, or buying a home in a rural area for a USDA loan.

If you qualify for these loans, it is a good idea to take advantage of them because they offer lower interest rates and better overall loan terms.

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Can’t Afford a $400,000 Mortgage With No Down Payment?

The monthly payments on a $400,000 mortgage with no down payment can be high even with a government-assisted loan. Here are some suggestions to help you cover them.

Pay Off Debt

If you have high-interest debt, your DTI ratio will be high, and you will not get the best interest rate from a lender. A personal loan can be used to consolidate credit card debt and lower the interest you pay overall. A personal loan can help you pay off some of your debt quicker so that you can improve your credit rating and qualify for a mortgage with better terms.

Look Into First-Time Homebuyer Programs

If you are a first-time homebuyer, government or charity-sponsored programs and grants can lower the costs. Some programs may help with a down payment and closing costs. You may qualify as a first-time buyer if you haven’t had any form of homeownership in the last three years.

There are also various tax deductions that can help lower your taxable household income making it easier to afford your mortgage payments. Check with your state or local government to find out what government programs are available to you or go to the U.S. Department of Housing and Urban Development website.

Take Advantage of Tax Deductions

You can save money on your taxes through various tax deductions. Federal and state deductions can lower your taxable household income. For example, for tax year 2024, the mortgage interest deduction could allow you to deduct the cost of mortgage interest paid on debt of up to $750,000 on a primary residence and one second home. Married taxpayers filing separately could deduct interest on up to $375,000 of indebtedness each. You may also qualify for mortgage credit certificates (MCCs). Your tax preparer can help you determine what you qualify for.

Care for Your Credit Score

Your credit score will have a huge impact on the terms that a lender gives you for a mortgage loan. Borrowers can cultivate a healthy credit score by using a credit card wisely. Pay off the balance each month and pay monthly bills, like utilities and rent, on time. Also, as noted above, watch your credit utilization ratio and only use up to 30% of your available credit.

Start Budgeting

If you don’t budget, you will not know how much you can afford to spend each month on housing or other expenses. When creating a budget, think about what your goals are for the next three months, the next year, and five years into the future. The cost of living in your state will be a factor in your planning, so think about whether you will be living in the same place for the long haul.

Track your take-home pay and your expenses. Then, look at areas where you can make positive changes. For example, if you eat out less each week, can you put an extra $100 into a savings account? Using a money tracker can help you keep to a budget.

Recommended: Home Loan Help Center

Alternatives to Conventional Mortgage Loans

The traditional route to buying a home is to take out a conventional mortgage with a bank. You will pay a set amount each month for the life of the loan, typically 15 to 30 years. There are alternative ways to finance a home, each with its own advantages and disadvantages. Here are a few of them.

Borrow from a Retirement Account

If you have significant funds in your 401(k) account or an IRA, you could withdraw them and use them to buy a home. However, if you’re under 59½ years old, you will have to pay a 10% penalty on the withdrawal and taxes on it. If you lose your job, the money has to be repaid within 60 days. Lastly, a withdrawal from a 401(k) (not a Roth IRA) is considered income and may put you in a higher tax bracket.

Borrow from Family

Some companies facilitate home loans between family members. If you choose this option, consult a lawyer and an accountant to make sure legal documents are in order and you will not be subject to the gift tax.

Borrow From an Insurance Policy

Depending on the insurance policy, you might be able to take out a loan against the principal. The cash value can be used to secure the loan, and the premiums used as the repayments. Check with a financial advisor to see how this would affect your future finances and your heirs, and to decide if this is a good option.

Find a Cosigner

Finding a cosigner might help you to qualify for a mortgage or get better loan terms.

Seller Financing

You might be able to secure a seller financing arrangement where the seller takes on the role of the bank and you make mortgage payments to them. The terms of the loan are agreed in advance. This is an option if the buyer cannot secure a conventional mortgage perhaps due to poor credit.

Rent-to-Own

A rent-to-own agreement might work if a buyer has sufficient funds for a down payment. If so, the seller might agree to accept some of the monthly rent as credit for a sale. Another way this could work is if the seller ups the final sales price and all of the rental payments go toward the down payment until the final sale. There are potential downsides to this approach; seek a lawyer’s advice if you are entering into a rent-to-own agreement.

Mortgage Tips

Before you settle on a lender, research all the options available to you. For example, are you a first-time homeowner? Can you qualify for an FHA loan with a lower interest rate and down payment?

Here are some additional tips on how to qualify for a mortgage.

1. Understand the Terms

Your mortgage contract will contain lots of fees and charges in addition to the terms. Have a lawyer assist you in understanding all the details including the payment schedule, penalties for missed or late payments, and penalties for paying off the loan early. Understand whether you have an interest rate that may go up over time and how high it can go.

2. Make Timely Payments

Your credit rating depends on your making timely payments. If you don’t, not only will your credit score suffer, but you will risk foreclosure on your loan if you fall behind on the payments.

3. Avoid Additional Debt

Before you take on the responsibility of a mortgage, it’s wise to pay down your debt so that you can get the best interest rate. It’s also wise to not take on additional debt after you take on a mortgage. If you do, you might find yourself with mounting interest payments and facing bankruptcy if you cannot afford to pay your monthly bills.

4. Shop Around for Home Insurance

You will have to take out a home insurance policy. However, shop around before you choose a provider to get the best quote.

5. Know What You Can Afford

It’s better to take on a mortgage for less than you are approved. For example, if you are approved for a $400,000 loan, you could accept a loan for $300,000. That will buy you some wiggle room and make the payments less stressful.

6. Watch Your Credit Score

As you build equity in your home, at some point you might decide to refinance, particularly if interest rates drop. Refinancing allows you to restructure your debt and pull out equity as cash. If interest rates are lower, your monthly payments might be less. When you maintain a good credit score and manage your debt well, you stand a better chance of qualifying for a relatively low interest rate with a reputable lender.

The Takeaway

It’s quite likely that you will need to earn around $130,000 a year to qualify for a $400,000 mortgage. However, if you can make a large down payment and you have little debt, you are in a much better position. A lender will look at your LTI ratio when considering you for a loan as well as your credit rating. Therefore, paying off high-interest debt, making regular payments to credit cards, and paying off the balance will make you an attractive borrower to a lender.

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

What income is needed for a $400,000 mortgage?

The income needed for a $400,000 mortgage will depend on your existing debt, your credit rating, and other assets, but in general, you’d probably need an income of around $130,000 a year to qualify. Each lender will look at different factors when assessing you as a risk.

Can I afford a $400K house with a $70,000 salary?

It would only be possible to afford a $400,000 home with a salary of $70,000 if you can put down a very large down payment. Alternatively, if you qualify for a government-backed FHA loan, you may be able to afford a $400,000 home with a 10% down payment, although you would want to have a close look at your household budget and other expenses before taking this step.

What is the average monthly payment on a $400,000 house?

The national average mortgage rate for a 30-year fixed-rate mortgage is 6.95% as of June 2024. If you bought a $400,000 house with 5% down, your monthly mortgage payment would be $3,295. That would include almost $800 per month in property taxes, insurance, and private mortgage insurance (PMI).

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Outside of housing and transportation, Americans spend more on food than anything else. According to the Bureau of Labor Statistics, the average household spends $5,703 annually on food in the home (not including takeout and dining out). That figure is more than $1,000 higher than three years ago.

While food is an essential expense — you have to eat to survive, after all — you can lower your grocery costs while still enjoying great-tasting and nutritious meals. Here are 22 ideas for saving on food purchases to get you started.

How to Save Money on Groceries

Ready to start trimming your grocery costs? Read on.

1. Have a Plan

Before you craft your grocery list, it’s wise to plan what meals and snacks you want to prepare for the week or weeks ahead. If you write it all down and then create your shopping list, you’re less likely to forget key items for certain recipes. You’ll know exactly what you need when you enter the store and will be less inclined to wander the aisles and pick up impulse purchases.

2. Scan Your Fridge

While you’re making your meal plan, check your pantry and refrigerator for items you already have on hand. Not only can you avoid buying duplicates, but you may find some hidden veggies in the fridge you’d forgotten about. You can put them to good use before they spoil.

3. Go Semi-Vegetarian

Meat tends to be one of the most expensive ingredients in many meals. But there are plenty of tasty recipes out there that use other sources of protein, such as beans, eggs, and tofu. Also, don’t count out using tasty veggies or grains as the star of a dish.

Planning just one or two meatless meals each week can automatically cut your food spending — and also help you eat a little healthier. You might start by searching online for “Meatless Mondays” recipes and seeing what inspires you.

💡 Quick Tip: Don’t think too hard about your money. Automate your budgeting, saving, and spending with SoFi’s seamless and secure mobile banking app.

4. Stick to a Grocery Budget

If you don’t include your groceries when making your budget, you may want to consider doing so. It can help you track exactly how much you’re spending and where you can cut back (like those cookies or snacks you may not always need but are in the habit of buying). Or you might realize that the fancy coffee beans you usually buy cost way more than the excellent French roast ones at your supermarket. By looking at the numbers, you’ll gain valuable insights.

5. Use Only Cash

Do you “get inspired” when you’re at the supermarket and find yourself snagging a container of pricey cashews here and some fancy cheese there, even though they aren’t on your list? It can be easier to overbuy when you use a credit card for your purchases. By paying with cash or your debit card, you can often do a better job of sticking to your grocery list.

6. Outsmart the Supermarket Selling Tactics

Grocery stores use a number of marketing tricks to get shoppers to spend more. These include stocking the most expensive items on the shelves right at your eye level, using end caps to grab your attention, and placing staples like milk, eggs, and bread at the back of the store so you’re forced to pass through several aisles of delicious food to get to them.

You can avoid falling for these marketing ploys by carrying a list (and sticking to it), and also by keeping your eyes on the upper and lower shelves, as this is where you’ll tend to find the more affordable brands.

7. Go Generic

Brand name products in the supermarket can often cost considerably more than store brands. Yet many store brands offer essentially the same quality as their brand name counterparts, and in some cases are produced at the same facilities (just packaged with a different label). One recent report found that you can save up to 40% by buying store brand. In other words, you could almost cut some grocery expenses in half.

While not all store brands are built the same, it’s worth trying a few if you’re grocery shopping on a budget. If you find that you can’t tell the difference, you may be able to enjoy some solid savings.

8. Use Store Loyalty Apps

If you shop at a large grocery store chain or mass retailer, you can often get special promotions and additional savings by downloading the store’s app.

Target, Walmart, Wegmans, Whole Foods, and other major stores have apps and programs that offer exclusive coupons to frequent shoppers. Often, taking advantage of these deals is as simple as letting the cashier scan a barcode on your phone as you’re checking out.

9. Prune Your Produce

Before you put fruits and veggies in the plastic bag and head to the register, you may want to take a moment to remove any stalks, leaves, or stems that aren’t edible. Since you’re paying by weight, anything that you remove to lower the weight lowers the price.

10. Shop In Season

Fruits and vegetables tend to be cheaper, and also taste better when they are in season locally. While you may be able to purchase fresh strawberries year-round, they’ll likely be more expensive (and less sweet) in the winter when they’re being harvested and shipped from somewhere far away.

You can check out this seasonality chart to find out when foods are in their prime where you live, and then adjust your menu planning accordingly.

11. Avoid Pre-Cut Products

If you just love that bag of grated cheese, you may want to consider comparing it to the price of the non-grated block. There’s a big difference in price, and grating cheese is really not a daunting task. The same goes for precut fruits and vegetables. Sure, they’re handy for snacking, but extra money in your savings account could be nicer. The same goes for salad kits and similar items that wind up costing you for the convenience.

12. Eat Before You Shop

Yes, this may be a common tip, but it’s a good one. Going grocery shopping while hungry can increase your chance of impulse buying. Expensive snacks can look especially enticing.

Shopping after you’ve already had a meal is a great way to keep any hunger pains from adding items to your shopping cart.

13. Keep an Eye on Unit Price

Comparing price and value can be tough when items don’t come in the same size. When in doubt, you can always turn to unit prices, which are often listed on the shelf tag. Unit price gives you an apples-to-apples comparison, such as ounces to ounces or liters to liters.

For example, the cheapest bottle of olive oil on the shelf might not be the best value. If you bought a larger one, it might cost a few bucks more, but its overall cost per ounce is lower, saving you more in the long run.

14. Use Rewards Credit Cards

Some credit cards offer extra cash back for groceries and even eating out. If you use one of these cards for your purchase, you could end up saving a pretty nice amount of money each month — sometimes as much as 5% depending on which card you carry.

Recommended: Examining the Price of Eating at Home vs Eating Out

15. Shop at Discount Grocery Stores

Some stores are simply more economically priced than others. According to one recent study, shoppers say these stores offer the best grocery deals for your buck: Food 4 Less (a subsidiary of Kroger), BJs, WinCo Foods, Giant Eagle, Grocery Outlet, Market Basket, Wegmans, Aldi, Costco, and Sam’s Club. There are a lot of Trader Joe’s fans out there as well.

Meal planning entails thinking ahead and creating a menu for the week, then using your menu to create a shopping list. You don’t have to plan every meal to the letter, but picking a few simple recipes you can whip up for dinner can save you from having to get take-out after a long workday.

Recommended: How Much Should I Spend on Food a Month?

16. Join a Wholesale Club

You might have noticed that a few of the stores mentioned in the tip above are wholesale clubs or warehouse clubs. These chains typically charge an annual membership fee. In return, you’re likely to find large, institutional size grocery items at discounted prices.

If it feels like too big a quantity for your household alone to get through before the food goes bad, you might partner with a friend. You can split the costs and share the bounty that you buy.

17. Buy in Bulk

Another way to shave down your grocery bill is to consider buying in bulk. Often, these retailers have a green angle and promote reusable packaging (such as bring your own container policies or using glass and metal vessels) to buy everything from nuts to cereal to pasta to olive oil from jumbo bins. The savings on packaging can be passed along, making these purchases more affordable. You may hear these stores referred to as refilleries; search this directory of refilleries for one near you.

Recommended: Does Buying in Bulk Save Money?

18. Reduce Food Waste

The average U.S. household wastes 38% of the food it buys, according to Feed America. That’s a huge number, totaling $92 billion pounds of food per year. It’s also expensive: Those figures mean almost four out of 10 of your hard-earned grocery dollars is basically being thrown away.

Focus on using what you buy so you don’t have to run to the grocery store and replace what’s spoiled. For example, you can increase the lifespan of lettuce by wrapping it in a paper towel to absorb moisture while it sits in your fridge.

19. Take Advantage of Rebate Apps

When you’re searching for easy ways to save money, it’s worth checking out all the many grocery rebate apps that are now available.

Apps like Ibotta, Receipt Hog, and Checkout 51, will often give you cash back for things you’d purchase anyway. While rebates don’t give you a discount upfront (like a traditional coupon), you should see savings in the long run.
Some apps send checks once you reach a certain cash back amount, such as $20.

20. Start a Kitchen Garden

Fresh herbs at the grocery store can be expensive, and often, recipes call for only a few sprigs or leaves, leaving the rest of a purchase to go to waste.

To avoid having to buy fresh herbs at the store, you may want to consider setting up a windowsill garden containing the herbs you reach for most often, such as parsley, mint, thyme, or basil.

Start-up costs are minimal, and these plants tend to be easy to grow — no green thumb required.

21. Hit the Farmer’s Market Later in the Day

If you love shopping at the local farmer’s market but don’t enjoy the dent it makes in your wallet, you may want to consider showing up near closing time.

At the end of the day, farmers often don’t want to pack up their food and take it home with them. If you walk around and make a reasonable offer on a box of produce they have left, you might score a great deal on fresh (and delicious) fruits and veggies.

22. Watch for Seasonal Deals

After major holidays like Halloween, Christmas and Easter, you can often get good deals on holiday-related items like candy. (And February 15th can be a great day to get a yummy heart-shaped box of chocolates at a deep discount.) If you don’t care about themed wrappers, you can save a nice chunk of change.

23. Shop Online

Buying dry goods and other non-perishables online instead of at the grocery store can end up saving you a lot of money, especially if you buy in bulk sizes and get those items delivered on a regular schedule. For example, Amazon offers up to a 15% discount for consumers who schedule auto-shipments for their products. However, do be cautious about using home-delivery food services, which can be pricey once the fees for delivery are added.

What’s the Average Cost of Groceries per Month?

The average cost of groceries per month will vary depending on several factors, such as the size of the household, the age of its members, location, and dietary habits. Someone who loves fish (wild-caught, not farmed, thank you) a few times a week and lives in San Francisco or Boston will likely be spending more than a person who lives in the Midwest and is a vegetarian who eats a lot of rice and beans.

That said, here are some figures on the cost of groceries per month:

•   Per person, the average cost of groceries in America in 2023 is $415.53 a month per person, according to Numbeo data.

•   Wondering about the highest and lowest costs? Move.org found that those living in Honolulu, Hawaii, pay the most for food every month (a steep $638.57), while residents of Cheyenne, Wyoming, have the lowest tab at $335.97.

The Takeaway

Wondering how to save money on groceries? With a little planning and a few fresh habits, you may be able to slash your food bills without sacrificing quality, taste, or nutrition. The cash you free up can then be put toward savings or another financial goal.

You may find that setting up a monthly food budget — and targeting spending amounts per week — can also help you spend less on food. Using a money management app can help you stick to your food budget.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.00% APY on SoFi Checking and Savings.

FAQ

How can I make my grocery bill cheaper?

There are many ways to lower your grocery costs, such as planning meals in advance and sticking to your list; buying (and eating) less meat; shopping at discount supermarkets and wholesale clubs; and learning how to compare prices per ounce vs. the price tag.

How can I cut my grocery bill in half?

Cutting your grocery bill in half could be possible with dedication and planning. One quick way to start saving is to buy store brands (sometimes called generic brands); this can save as much as 40% vs. brand names.

What are some discount grocery stores?

Some discount grocery stores include BJs, Costco, Food 4 Less, Aldi, and WinCo Foods.

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As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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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.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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