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Canceling a credit card might seem like a good idea if you’re trying to get debt under control or you want to consolidate your cards. But closing a credit account may do more harm than good and damage your credit standing. Before you take action, here’s what you need to know — and other strategies you may want to consider instead.

Understanding the Impact of Credit Utilization Ratio

In order to understand why canceling a credit card can hurt your credit score, you need to know about something called the credit utilization ratio. This is the ratio of your total credit to your total debt.

Another way to think of it is how much of your available credit you’re using. For instance, if you have two credit cards with a total line of credit of $20,000 and you use $5,000 of that, you have a credit card utilization ratio of 25%. In addition to credit cards, your credit utilization ratio can include things like loans, such as a mortgage, car loan, and personal loan.

Your credit utilization ratio directly affects your credit score. In fact, it accounts for 30% of your FICO score. Your credit utilization ratio is the second-most important factor in your credit score (payment history is number one). Ideally, lenders like to see a person’s credit utilization ratio below 30%.

When you cancel a credit card, you reduce your available credit. This can cause your credit utilization ratio to jump up — especially if you owe money on other credit cards — and can negatively impact your credit score.

Reasons to Cancel a Credit Card

There are several factors that may be motivating you to want to cancel a credit card, including:

•   Too much debt. Perhaps having the card on hand is causing you to overspend and take on even more debt. If canceling the card will help you manage your finances better and get your debt under control, it can be a good option.

•   A high annual fee. If the card’s fee is high and you aren’t taking advantage of any of the perks like travel rewards to offset it, you may want to find a card that’s a better fit.

•   Too many cards. If multiple credit cards are causing you to stress out and miss payments, fewer cards might help lighten the load. (A budget planner app can help you spot upcoming bills and manage bill paying.)

How to Cancel a Credit Card

If, after considering the pros and cons, you’ve decided to go ahead and cancel the credit card, here’s how to do it:

1.    Pay off the remaining balance on the card, or transfer the balance to another credit card.

2.    Contact the credit card company, preferably by phone. Some credit card companies allow customers to cancel online, but most will require a call. Keep in mind the company wants to hold onto customers, which could mean that they will try to entice you with offers or deals. You have the right to cancel at any time.

3.    Consider sending written confirmation to make things official. Send a letter to the credit card company informing them that you have canceled the same credit card account. Post it via certified mail to ensure the company receives the letter with confirmed receipt.

4.    Cut up the card. Shredding or destroying the card helps prevent fraud.

5.    Look at credit reports for changes to your credit score. The canceled account should be reflected in your credit score within several weeks. AnnualCreditReport.com offers a free copy of your credit report once a year.

Keep in mind that you can also track your credit score with a money tracker app. It helps you stay up to date with any changes that affect your score, allows you to connect all your bank accounts, and lets you monitor your spending habits and savings all in one place.

Can Closing a Credit Card Impact Your Credit History?

Closing a credit card can affect the length of your credit history. That’s important because credit history is one of the factors used to help determine your credit score. In general, creditors want to know that you’ve had credit accounts over a period of time, so the longer the relationship, the better.

Recommended: 10 Credit Card Rules You Should Know

How to Downgrade Your Credit Card

If you’re considering canceling your credit card because of high fees or a high interest rate, you might want to downgrade the card instead. By downgrading, you can swap your current credit card for one with a lower fee or lower interest rate.

Downgrading can provide some of the benefits of canceling the card without the negative impact of closing the account.

If downgrading sounds like a good option for you, these strategies can help:

•   Research the credit card issuer. Do they have cards with a low or no annual fee? It may be worth switching to credit card issuers with one of those.

•   Call the credit card company and ask for a downgrade. They may offer to waive the annual fees on your existing card. Or they may downgrade you to a low-interest card with no annual fee.

•   Ask about a partial refund. Some credit card companies will provide a partial refund on the annual fee, depending on when you downgrade. Ask the customer service representative if they can prorate the annual fee or provide any refund.

How to Keep Your Credit Utilization Rate Low

Whether you downgrade a credit card or not, it’s important to improve your credit utilization rate since it counts for 30% of your FICO score. Here’s how to keep yours low.

•   Make more than one credit card payment a month. Making more than two automatic bill payments or one payment per billing cycle can benefit your credit score. That’s because credit card companies report balances towards the end of the billing cycle. Making several payments can reduce your credit utilization ratio when your balance is reported.

•   Keep credit accounts open, if possible. Keeping a card open, even if you rarely use it, increases your credit limit and helps lower your credit utilization rate.

•   Ask for an increase in credit limit. If you have a record of on-time payments, your credit card company may be willing to increase the credit limit for your account. And the more available credit you have, the better your ratio. Call customer service to make the request.

The Takeaway

Canceling a credit card can negatively impact your credit score, so make sure to consider all your options carefully. You can keep the credit account open, which can help with your credit history, and rarely use the card. Or you can downgrade to a card with a lower interest rate and no annual fee. In the end, the decision is yours, but it’s good to know you have choices.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

See exactly how your money comes and goes at a glance.

FAQ

How do I close a credit card without affecting my credit score?

Closing a credit card is likely to have a negative impact on your credit score. Downgrading to a card with a lower interest rate and no annual fee may be a better option.

Is it better to cancel unused credit cards or keep them?

If the credit card has a low interest rate and no annual fee, it can be better for your credit score and your credit history to keep the card.

Does canceling a credit card hurt your credit?

Canceling a credit card can hurt your credit score. However, practicing other good credit habits, like paying your bills on time, can help you gradually get back in good standing.

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SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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.

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Considering a job in the Great Lakes State? A typical worker in Michigan earns around $58,000 a year, according to a 2024 Forbes analysis of data from the Bureau of Labor Statistics (BLS). In comparison, the average annual salary nationwide is slightly higher, at $59,428.

Of course, the amount you bring home will depend on a number of factors, including the type of job you have, where you live, and your age. Let’s take a closer look.

Average Salary in Michigan by Age in 2023

When it comes to earning potential, your age — and by extension, experience level — play a role. As the Census Bureau’s American Community Survey shows, workers aged 45 to 64 have the highest median household income ($82,652), followed by those aged 25 to 44 ($75,984). The median income for those 65 and older is around $51,010. At $40,683, people under the age of 25 have the lowest median household income, which is perhaps indicative of the entry-level salaries this age group often earns.

No matter where you are in your professional journey, it helps to have a firm grasp of your finances. A money tracker can give you insights into your spending habits and help you make progress toward short- and long-term financial goals.

Recommended: U.S. Average Income by Age

Average Salary in Michigan by City in 2023

Where you live can also impact how much you earn. As the chart below shows, workers in some Michigan cities may be making out better than others. In Sterling Heights, for instance, the average wage is 28.0% higher than the state average.

But well-paying jobs can be found in smaller cities, too. Career opportunities are expanding in South Lyon, for example, and with it, wages: The average salary is $65,369 a year. Tools like a budget planner app can help you make the most of whatever your take-home pay is.

City	Average Annual Salary
Sterling Heights	$74,878
Detroit	$71,156
Lansing	$68,755
Flint	$68,679
Holland	$68,668
Livonia	$67,785
Saginaw	$66,875
Warren	$65,729
South Lyon	$65,369
Kalamazoo	$64,846

Source: ZipRecruiter

Median Salary in Michigan by County

Salaries don’t just vary by city. They can also differ from county to county. According to Census Bureau data, median family incomes in Michigan’s southern and southeastern counties — as well as those near large cities like Detroit — tend to be higher than in other parts of the state.

Here’s a look at the median household incomes of the ten most-populous counties in Michigan.

County	Household Median Income
Livingston County	$96,135
Oakland County	$92,620
Washtenaw County	$84,245
Ottawa County	$83,932
Kent County	$76,247
Macomb County	$73,876
Kalamazoo County	$67,905
Ingham County	$62,548
Genesee County	$58,594
Wayne County	$57,223

Source: Census Bureau

Recommended: Average Pay in the United States

Examples of the Highest Paying Jobs in Michigan

Michigan has long burnished its reputation as a center for auto manufacturing, but it’s also cementing its status as a hub for tech and healthcare. Not surprisingly, some of the highest-paying jobs in the state can be found in the engineering, management, technology, and healthcare sectors.

As the list below shows, some of the top-paying positions require specialized training or advanced degrees, while others may be a good job for introverts.

Profession	Annual Mean Wage
Surgeons	$340,670
Psychiatrists	$246,710
Airline Pilots, Copilots, and Flight Engineers	$240,620
Compensation and Benefits Managers	$159,360
Architectural and Engineering Managers	$157,050
Computer and Information Systems Managers	$156,340
Financial Managers	$147,550
Pharmacists	$128,860
Public Relations Managers	$125,320
Industrial Production Managers	$119,610

Source: BLS

The Takeaway

The typical worker in Michigan may not be drawing a six-figure salary, but their take-home pay of $58,000 is near the national average. Plus, the cost of living in the Great Lakes State — think transportation, utilities, groceries, and housing — is lower than the national average. Keep in mind that as with other states, your take-home pay in Michigan will vary depending on a number of factors, including where you live, the type of work you do, and where you are in your career.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

See exactly how your money comes and goes at a glance.

FAQ

What is a good average salary in Michigan?

A “good” average salary is one that can cover basic living expenses with enough left over for savings and some fun. For a single adult in Michigan, a salary of more than $54,000 a year may qualify as “good.”

What is the average gross salary in Michigan?

The average salary in Michigan in 2024 is $58,000.

What is the average income per person in Michigan?

The average income per person in MIchigan is $27.88 per hour, or $58,000 per year, according to a 2024 Forbes analysis of data from the Bureau of Labor Statistics (BLS).

What is a livable wage in Michigan?

According to MIT’s Living Wage Calculator, a livable wage for a single adult in Michigan is $42,182. But if you live in a household with multiple people, you’ll likely need more money. For instance, if you and your significant other both work and have two children, you could make ends meet on $53,622 a year.

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SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

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.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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.

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In general, you need an income of at least $64,000 a year to afford a $200,000 mortgage. If you’re carrying significant debt, however, like student loans or high-interest credit cards, you may need to buy something slightly less expensive on such a salary.

Several factors impact how much house you can afford and what lenders are willing to give you on your salary, including your credit history, your down payment, and your debt-to-income ratio. We’ll break down these and other factors as we explore the income needed for a $200,000 mortgage.

Income Needed for a $200,000 Mortgage

Mortgage lenders typically don’t list strict income requirements for a home loan, though they will want to know that you can afford closing costs, which typically range from 3% to 6% of the loan principal. For simplicity’s sake, assuming no money down, you would need $6,000 to $12,000 for a $200K mortgage in a bank account.

Mortgage lenders will, however, analyze your annual income to ensure you’re able to keep up with your estimated monthly mortgage payments. In addition, lenders will consider other factors, such as your:

•   Debts

•   Employment

•   Down payment

•   Credit history

Even if a lender would approve you for a $200,000 mortgage, it’s a good idea to decide for yourself if you can actually afford it. Many experts recommend using the 28/36 rule. This means that housing costs should account for no more than 28% of your income, and you should spend no more than 36% of your income on all debts combined.

Assuming you have minimal debt, that means you can afford to spend 28% of your gross monthly income on a mortgage. (That’s how we get our rough estimate of a $64,000 salary for a $200,000 home.) However, if you have major debt elsewhere — car loan, student loans, personal loans, and credit cards, for instance — you may need to keep your mortgage debt lower so you don’t exceed 36% of your total income.

Use a home affordability calculator if you’re not sure where to start.

How Much Do You Need to Make to Get a $200K Mortgage?

In general, we recommend making at least $64,000 a year if you have a $200K mortgage. However, several factors can impact this, including:

•   What other debts you have

•   How much you have saved for a down payment

•   The type of mortgage loan you’re applying for

What Is a Good Debt-to-Income Ratio?

In keeping with the 28/36 rule, lenders prefer to see a debt-to-income (DTI) ratio of 36% or lower. This is not a hard-and-fast rule, however. A qualified mortgage lender may look for a DTI ratio of 43% or less. In certain cases, Fannie Mae could allow a DTI as high as 50% for specific mortgage loans. To compute your DTI ratio, add all your monthly debts and divide by your gross monthly income, then multiply by 100.

What Determines How Much House You Can Afford?

Several factors impact how much house you can afford, including:

•   Your income: The amount of money you make dictates how much you can afford to spend on a monthly mortgage payment, including property taxes, homeowners insurance, and private mortgage insurance (PMI) when required.

•   Your debt: Other outstanding debts mean your funds are limited for new loans. If you’ve got to pay down other debts each month, you may want to aim for a less expensive home (and thus a smaller mortgage).

•   Your location: A $200,000 home looks a lot different depending on where you live. In places with a low cost of living, you might be able to get a fully renovated home. In coastal and urban areas, $200K doesn’t go as far: You may get a small home or a home in need of major repair. Hoping to get the most bang for your buck? Here are the most affordable places to live in the United States.

•   Your credit score: Even if you have the income to afford a hefty mortgage now, a spotty credit history can turn off lenders. They may either offer you an impossibly high interest rate or deny your loan request, depending on how low your score is.

Recommended: Mortgage Calculator

What Mortgage Lenders Look For

When you begin the mortgage preapproval process, lenders will be looking for a few factors to determine if you’re eligible for a loan:

•   Stable, predictable income (though it’s not impossible to get a mortgage without regular income)

•   Your assets

•   Your credit history

•   The size of your down payment

•   Any existing debts, including credit cards, student loans, personal loans, and car loans

$200,000 Mortgage Breakdown Examples

Several major factors can impact how a mortgage shakes out, including your down payment amount, the interest rate (and whether it’s fixed or adjustable), and the loan term.

You should also factor in homeowners insurance and property taxes. We recommend using a mortgage calculator with taxes and insurance for an accurate picture.

Here are a few examples of how your monthly payments on a $200,000 mortgage can vary:

•   A $200,000 loan with $20,000 (9%) down and an interest rate of 7.00% over 30 years, with taxes and insurance, would cost an average of $1,822 a month.

•   A $200,000 loan with $20,000 (9%) down and an interest rate of 7.00% over 15 years, with taxes and insurance, would cost an average of $2,229 a month.

•   A $200,000 loan with 20% down and an interest rate of 7.00% over 30 years, with taxes and insurance, would cost an average of $1,622 a month.

•   A $200,000 loan with 20% down and an interest rate of 7.00% over 15 years, with taxes and insurance, would cost an average of $2,089 a month.

You’ll notice that a 15-year loan results in higher monthly payments; however, because the loan is only 15 years, the homeowner would spend significantly less in interest over the life of the loan and would be debt free much sooner.

How Much Will You Need for a Down Payment?

How much you need for a down payment depends on the type of loan you’re applying for and your other financial goals. Conventional wisdom used to advise putting 20% down on a house, but that’s often unrealistic for today’s homebuyers.

Certain loan types require significantly less down. An FHA loan (from the Federal Housing Administration) requires as little as 3.5% down. A VA loan (from the U.S. Veterans Administration and USDA loans (from the U.S. Department of Agriculture) don’t require any down payment.

Can You Buy a $200K Home With No Money Down?

If you can qualify for specific types of loans, such as a VA loan or USDA loan, it’s possible to buy a $200,000 home with no money down. These loans, however, have strict eligibility requirements that are limited to a small percentage of borrowers.

Can You Buy a $200K Home With a Small Down Payment?

FHA loans are an option for borrowers who can’t come up with 20% or even 10% money down for a home. With a government-backed FHA loan, you can put down as little as 3.5%. In the case of a $200K mortgage, that’s $7,000. Some conventional lenders also allow as little as 3% down for first-time homebuyers.

Is a $200K Mortgage With No Down Payment a Good Idea?

In today’s housing market, it’s hard to come buy a house that is less than $200,000. A $200K home — or one that’s even more expensive — may be your only option. If it is your only option, and you can’t come up with the funds for a down payment, a 0% down mortgage could be a good idea.

However, keep in mind that you’ll have no home equity at the start of the loan, and you’ll likely have to pay PMI until you’ve paid off at least 20% of the home. It also means your monthly payments will be larger.

Recommended: Home Loan Help Center

Can’t Afford a $200K Mortgage With No Down Payment?

When you don’t put any money down when buying a home, monthly payments will be higher. If you find they’re too high for you to afford, you’ll need to make some changes before you can buy a home. Here are some ideas:

Pay Off Debt

Focus on other debts, such as high-interest credit cards and student loans. If you’re able to wipe out debt, you’ll have more money in your monthly budget to spend on housing costs.

Look Into First-Time Homebuyer Programs

First-time homebuyer programs can help you out when you’re trying to get your first mortgage. For instance, if you can save up 3.5%, you can qualify for an FHA loan with an affordable interest rate.

Build Up Credit

If you take the time to focus on your credit score (make on-time payments, pay down debts, reduce credit utilization), you may get a lower interest rate on a loan offer. This can help keep your monthly payment down.

Start Budgeting

If all else fails, put the new house on hold and start focusing on growing your savings. You can do this by finding a new income source, but you can also analyze your budget and cut out unnecessary expenses. Try getting rid of some streaming services, dining out less, and finding ways to reduce your utility bills.

Mortgage Tips

We’ve put together several tips for qualifying for a mortgage, but here’s the quick version:

•   Make sure you’re good to go before applying: Spend time with your budget to understand what you can afford, focus on paying down debts to reduce your DTI, and check your credit score to ensure it’s strong enough to qualify.

•   Understand the language: Knowing the difference between fixed-rate and adjustable-rate mortgages is crucial. Research other terms such as principal, escrow, mortgage refinance, and PMI to make sure you’re armed with all the info you need.

•   Shop around: Get prequalified with multiple lenders to ensure you find the right mortgage loan for you.

The Takeaway

The income needed for a $200,000 mortgage is roughly $64,000, but so much of that depends on other factors, including your down payment, your credit score, the type of loan you’re getting, and your other debts.

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 I need for a $200K mortgage?

We estimate that the average homebuyer needs a $64,000 annual income for a $200,000 mortgage, but several factors can impact this.

Can I afford a $200K house on $50K?

While we recommend a $64K salary for a $200,000 mortgage, you may be able to afford a $200,000 house on $50,000 if you have a large down payment saved up and have minimal other debts.

Can I afford a $200K house on a $60K salary?

At $60,000, you might be able to handle a $200,000 mortgage if your other debts are minimal and you have a good-sized down payment ready to go.

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Photo credit: iStock/martin-dm

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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.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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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If you earn around $100,000 to $150,000 a year, or more, you might be in a position to afford a $325,000 mortgage. But the amount you’ll actually qualify to borrow — even if you’re in that salary range — will likely depend on several variables, including how much debt you have and your credit score.

Read on for a look at how much income may be needed for a $325,000 mortgage, how a borrower’s income fits into the overall mortgage calculation, and how lenders typically decide how much mortgage a homebuyer can manage.

What Factors Do Mortgage Lenders Consider?

Homebuyers tend to think the amount they’ll be approved for when they apply for a mortgage will be based mostly on their household income. But income is just one of several factors lenders look at when deciding how much someone can borrow.

The home mortgage loan you can qualify for depends on how much the lender believes you can reliably pay back. And you can expect the loan company to run your financials through several different calculations to come up with that amount. Here are a few things lenders may look at:

Income

Lenders will look at how much you make to help determine if you can afford the monthly payments on the amount you hope to borrow. They’ll also want to know how reliable that income is, so you may be asked how long you’ve had your job (or your business if you’re self-employed). If you’re wondering if your income will be considered high enough to afford a $325,000 loan, you may want to use an online home affordability calculator before you apply for a mortgage.

Creditworthiness

Lenders also will check your credit score and credit reports to ensure you have a history of being financially responsible and that you pay your bills on time.

Down Payment Amount

Lenders like to see a larger down payment because it can show that you’re serious about your investment. The more you put down, the lower their financial risk. But contrary to what many buyers believe, a 20% down payment isn’t always required to get a home loan. You may be able to put down less, depending on the type of mortgage you plan to get.

Debt-to-Income (DTI) Ratio

Lenders may also compare your monthly gross income to your existing monthly debts (credit cards, student loans, car payments, etc.) to assess whether you’ll be able to manage all those payments and aren’t getting in over your head. This calculation is called your debt-to-income ratio.

What Is a Good Debt-to-Income Ratio?

The Consumer Financial Protection Bureau recommends that homeowners work toward maintaining a DTI ratio of 36% or less. And that’s the number mortgage lenders generally look 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 mortgage you might be able to afford on your income.

The 28/36 Rule

The 28/36 rule combines two factors that lenders 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 $120,000, that’s roughly $10,000 per month. So with the 28/36 rule, you could aim for a monthly mortgage payment of about $2,800, as long as your total monthly debt (including the house payment, car payments, credit cards, etc.) isn’t more than $3,600.

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 $10,000 and your after-tax income is about $8,000. In this scenario, you might spend between $3,500 and $3,600 per month on your debt payments and mortgage combined. This calculation offers a bit more breathing room with your mortgage payment, as long as you aren’t carrying a lot of debt.

The 25% After-Tax Rule

If you’re nervous about making mortgage payments, this method will give you a more conservative number to keep your budget in line. With this calculation, your target is to spend no more than 25% of your after-tax income on your mortgage. So, for example, if you make $8,000 a month after taxes, you might plan to spend $2,000 on your mortgage payments.

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

What Determines How Much House You Can Afford?

Here’s something else to remember when determining how much income is needed for a $325,000 mortgage: A house payment generally isn’t limited to just principal and interest. And the extra costs that may be tacked on every month can add up fast.

Some of the costs covered by a monthly loan payment can include:

Principal

Principal is the original amount borrowed from the lender to buy the home, minus the down payment. 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 general economic and market factors.

Homeowners Insurance

The cost of homeowners insurance also may be rolled into your monthly mortgage payment, and your lender or loan servicer will pay the premium when it’s due.

Mortgage Insurance

Depending on the type of loan you have 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 will also go toward the property taxes you’ll need to pay your local government.

Recommended: Home Loan Help Center

$325,000 Mortgage Breakdown Examples

The monthly payment on a $325,000 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 help you get an idea of what your payments might look like. Here are some examples of how the payments for a $325,000 mortgage with a 20% down payment might break down.

30-Year Loan at 6.00% Fixed Interest Rate

Total Payment: $1,864

Principal and Interest: $1,559

Other Costs (estimated PMI, homeowners insurance, and property taxes): $305

15-Year Loan at 6.00% Fixed Interest Rate

Total Payment: $2,499

Principal and Interest: $2,194

Other Costs (estimated PMI, homeowners insurance, and property taxes): $305

30-Year Loan at 6.50% Fixed Interest Rate

Total Payment: $1,948

Principal and Interest: $1,643

Other Costs (estimated PMI, homeowners insurance, and property taxes): $305

15-Year Loan at 6.50% Fixed Interest Rate

Total Payment: $2,570

Principal and Interest: $2,265

Other Costs (estimated PMI, homeowners insurance, and property taxes): $305

30-Year Loan at 7.00% Fixed Interest Rate

Total Payment: $2,035

Principal and Interest: $1,730

Other Costs (estimated PMI, homeowners insurance, and property taxes): $305

15-Year Loan at 7.00% Fixed Interest Rate

Total Payment: $2,642

Principal and Interest: $2,337

Other Costs (estimated PMI, homeowners insurance, and property taxes): $305

Pros and Cons of a $325,000 Mortgage

Though some states are more affordable than others, with the way the housing market is going these days, it may be difficult to find a place you can purchase with a $325,000 mortgage. (According to Redfin, the median sale price in the U.S. in April 2024 was $433,558.) But if you can manage it — whether by finding a lower-cost home or by putting more money down — you may find you can benefit from lower monthly payments.

Even if you can only afford a starter home or fixer-upper — depending on home prices where you live — you’d be getting your foot in the door of homeownership, and that could mean building equity for the future.

Recommended: Tips to Qualify for a Mortgage

How Much Will You Need for a Down Payment?

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

Can You Buy a $325,000 Home with No Money Down?

You may be able to get a $325,000 mortgage with a 0% down payment if you can qualify for a government-backed VA or USDA loan. 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.

Borrowers must meet specific requirements to qualify for both VA and USDA no-down-payment loans, and not all lenders offer these programs. But if you think you may be eligible, this could be an option worth looking into.

Can You Buy a $325,000 Home With a Small Down Payment?

Some private lenders, including SoFi, will accept as little as 3% down on a conventional loan, so don’t feel as though you have to necessarily come up with 20% before you can pursue homeownership.

You might want to check out the requirements for a government-backed FHA loan, which also allows borrowers to make a small down payment. Or you may be able to find a state or local program that offers down payment assistance.

Is a $325,000 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 home buyers. And the thought of skipping that step can be appealing. Avoiding a down payment may help you get into a home faster or allow you to hold onto your savings for other purposes, such as renovations, an emergency fund, or other financial goals.

It’s important to keep in mind, though, that without a down payment, it can take longer to build up equity in your home. You may also pay more interest over the life of the loan because you’re borrowing more money. Additionally, although 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 $325,000 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 $325,000 mortgage:

Wait Until You’re Earning More

If you’re just starting out in your career, and you expect your salary to steadily increase as you move up the ladder, you may want to put homeownership on hold until you’re earning more. You’ll also have a longer work history for lenders to look at when they’re considering what interest rate to offer.

Focus on Saving More

You may choose to press pause on your home purchase while you save more money. Creating a budget and trimming other expenses could help you reach your savings goal. And if you can come up with a bigger down payment, you may be able to borrow less and keep your monthly payments to a more reasonable amount.

Look for a Less Expensive Home to Buy

If you’re determined to get into a home but can’t find something that fits your budget, you may want to widen your search area. If you’re willing to relocate, for instance, you may want to look into the cost of living by state to find an affordable place to settle down. Or maybe you could trim your list of “must-haves” to help keep the cost down.

Consider Sharing the Cost with a Roommate

Whether it’s with a friend, sibling, or significant other, buying a home with a non-spouse can make the purchase and mortgage payments more manageable. Before you sign, though, it’s important to be clear about your expectations and all aspects of this financial agreement.

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:

Homebuyer Assistance 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 it may be worth doing some research or asking a mortgage professional, to see if you’re eligible and could benefit.

Rent to Own

Another option might 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 a mortgage. 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:

Check on Your Credit

If you aren’t sure what your credit looks like these days, you can visit AnnualCreditReport.com to get a free copy of your credit report from each of the three major credit bureaus: Equifax, Experian, and Transunion.

Checking your reports can give you an idea of what lenders might see when they evaluate your credit. If there are any errors on the report, you can take steps to get them fixed. 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.

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, HOA dues, maintenance, and other expenses before you make the leap to homeownership.

Find the Mortgage and Terms 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 loan length

Consider Getting Preapproved

Going through the mortgage preapproval process with a lender can provide a reliable estimate of how much you can afford to spend on a home. And having loan preapproval might 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 important to get it right. Taking the time to do some research and/or asking for help from a professional could keep you from getting 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 $325,000 mortgage?

If you make at least $100,000 to $150,000 a year, you may be able to comfortably afford the payments on a $325,000 mortgage, depending on how much debt you’re carrying and other variables.

Can I afford a $325,000 house on a $70,000 salary?

You may be able to afford a $325,000 house on a $70,000 salary if you have enough saved for a large down payment, have a good credit score, and/or are carrying little or no debt.

Can I afford a $325,000 house on a $60,000 salary?

If you can make a large down payment, you may be able to afford a $325,000 house on a $60,000 salary. Otherwise, it could be a challenge to qualify for a loan or keep up with your monthly payments.

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Photo credit: iStock/Nuttawan Jayawan

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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.

^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.
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.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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.

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If you’re single and you only have to worry about taking care of yourself financially, you may be able to live pretty comfortably on a salary of $65,000.

According to the Bureau of Labor Statistics (BLS), the median salary nationwide was $59,228 in the first quarter of 2024. This means at $65,000 per year, you’re earning more than the typical worker. But if the cost of living is higher where you live or if you’re carrying a lot of debt, stretching your paycheck from month to month could be a challenge.

Read on to learn how a $65,000 salary stacks up depending on location and other factors.

Is $65K a Good Salary?

If you’re single and child-free, you may be able to get by fairly well on a $65,000 income. But the amount you pay — all on your own — for housing, utility bills, groceries, and other basic costs could be a major factor in how well you’re able to manage. Tools like a money tracker can help you monitor your spending and spot upcoming bills.

Of course, day-to-day expenses can vary widely depending on where you live. To get an idea of where you stand, and if $65,000 a year is a good salary for you, it can help to look at the cost of living and the average salary in the U.S. and the state where you live.

Median Salary by State

A $65,000 annual salary is above average in most of the U.S., but wages differ significantly from state to state. Here’s a summary of the median household income in each state, based on the most recent data available from the U.S. Census Bureau.

State	Median Household Income
Alabama	$59,609
Alaska	$86,370
Arizona	$72,581
Arkansas	$56,335
California	$91,905
Colorado	$87,598
Connecticut	$90,213
Delaware	$79,325
Florida	$67,917
Georgia	$71,355
Hawaii	$94,814
Idaho	$70,214
Illinois	$78,433
Indiana	$67,173
Iowa	$70,571
Kansas	$69,747
Kentucky	$60,183
Louisiana	$57,852
Maine	$68,251
Maryland	$98,461
Massachusetts	$96,505
Michigan	$68,505
Minnesota	$84,313
Mississippi	$52,985
Missouri	$65,920
Montana	$66,341
Nebraska	$71,772
Nevada	$71,646
New Hampshire	$90,845
New Jersey	$97,126
New Mexico	$58,722
New York	$81,386
North Carolina	$66,186
North Dakota	$73,959
Ohio	$66,990
Oklahoma	$61,364
Oregon	$76,362
Pennsylvania	$73,170
Rhode Island	$81,370
South Carolina	$63,623
South Dakota	$69,457
Tennessee	$64,035
Texas	$73,035
Utah	$86,833
Vermont	$74,014
Virginia	$87,249
Washington	$90,325
West Virginia	$55,217
Wisconsin	$72,458
Wyoming	$72,495

Recommended: Highest Paying Jobs by State

Average Cost of Living in the US by State

If you live in one of the more expensive states in the U.S., you already know how the high cost of housing, utilities, and other basics can affect your budget. Here’s a breakdown of where each state ranks when it comes to the cost of living, according to 2023 data from the Missouri Economic Research and Information Center (MERIC).

State	Cost of Living Index
Alabama	88.3
Alaska	125.2
Arizona	108.4
Arkansas	89.0
California	138.5
Colorado	105.1
Connecticut	112.8
Delaware	101.1
Florida	100.7
Georgia	90.8
Hawaii	180.3
Idaho	98.6
Illinois	92.1
Indiana	91.0
Iowa	90.3
Kansas	87.1
Kentucky	92.0
Louisiana	91.0
Maine	109.9
Maryland	116.5
Massachusetts	146.5
Michigan	90.6
Minnesota	94.1
Mississippi	86.3
Missouri	88.5
Montana	102.9
Nebraska	90.9
Nevada	101.0
New Hampshire	114.1
New Jersey	113.9
New Mexico	94.0
New York	125.9
North Carolina	95.3
North Dakota	94.6
Ohio	94.7
Oklahoma	86.2
Oregon	114.7
Pennsylvania	95.6
Rhode Island	110.7
South Carolina	95.3
South Dakota	92.4
Tennessee	90.3
Texas	92.7
Utah	103.2
Vermont	115.3
Virginia	101.9
Washington	116.0
West Virginia	87.7
Wisconsin	95.1
Wyoming	92.4

How to Budget for a $65,000 Salary

Even if you’re earning a six-figure salary, creating a realistic budget can help you stay on course when it comes to managing your money.

One popular budgeting method that can give you an idea of how to divide up your wages every month is the 50/30/20 rule, which allocates after-tax income to three basic categories:

•   50% to “needs.” This includes essentials like housing, utilities, food, transportation, insurance payments, and debt payments.

•   30% to “wants,” which encompasses everything from dining out to vacations to shopping.

•   20% to savings for future goals. This category can include things like extra payments to help pay off loans sooner, saving for a down payment on a home, an IRA or other retirement contributions, or an emergency fund.

Using this method, a $65,000 salary, which comes to about $54,800 a year after federal taxes, or $4,567 each month, might look like this:

•   $2,283 each month to needs

•   $1,370 each month to wants

•   $914 each month to savings and/or paying down debt

While this approach leaves room for a little fun, it may not work for everyone. If you find you need to make some adjustments to fit your circumstances, a budget planner app may make it easier to track your spending so you can decide where to cut back.

How to Maximize a $65,000 Salary

Besides thoughtful budgeting, there are several other things you might be able to do to help maximize your $65,000 salary. Here are some strategies to consider:

Make the Most of Employee Perks

Good benefits can sometimes make up for a smaller paycheck or add value to an already solid salary. If your employer’s 401(k) plan offers a matching contribution, it could help you save more for retirement. And if you’re able to work remotely, you might be able to spend less each month on transportation costs or your work wardrobe.

Avoid Account Fees

Small monthly fees can sometimes go unnoticed when you’re worrying about bigger bills, like your rent or car payment. But with a little research and comparison shopping, you may be able to avoid the common bank fees, credit card fees, and investment fees that can slowly eat away at your hard-earned income.

Pay Bills on Time

Besides the penalty fees you might face if you push your bill-paying limits too far, late payments can take a toll on your credit score, which could affect the interest rate you might pay on a loan or credit card.

Build an Emergency Fund

An unexpected expense like a high car repair or a temporary pay cut can quickly blow up a budget. Setting aside money in an emergency fund could help keep you from falling behind on your regular obligations.

What Quality of Life Can You Expect with a $65,000 Salary?

Everyone has a different idea of contentment, and the amount of money you need to feel comfortable may look different than another person’s. When deciding if $65,000 is a good salary for you, some factors to consider might include:

•   Do you want to live in a big city, or is life in the suburbs or a small town more of your thing?

•   How much do you like to go out to eat, attend concerts, and travel? Are you willing to sacrifice other things so you can have these experiences?

•   If you’re new in your career, is $65,000 a good entry-level salary for the type of job you have? Do you expect to make more later?

•   How much are you hoping to save for short- and long-term goals, like a wedding, home, or retirement?

•   Is a 50/30/20 budget doable on your salary?

Is $65,000 a Year Considered Rich?

“Rich” is another subjective term. If your definition of rich is what the top earners in the U.S. make, $65,000 falls short. According to the Economic Policy Institute, the top 10% of earners made, on average, $167,639 in 2021, the most recent year for which data is available. The top 5% earned $335,891. And to make it into the top 1%, you’d have to earn $819,324 or more.

But wealth isn’t necessarily determined only by the number on a paycheck. If you own much more than you owe, you may still have a high net worth. And if you can live comfortably on $65,000, you may feel richer than someone who earns a six-figure salary but can’t manage to make ends meet.

Recommended: Net Worth Calculator By Age

Is $65,000 a Year Considered Middle Class?

Generally speaking, yes. Pew Research defines “middle-income” Americans as those whose annual income is two-thirds to double the median household income, adjusted for household size. Using the BLS’s median income number from the first quarter of 2024, $59,228, that means a single person who earns from $39,485 to $118,456 could be considered middle income.

What Kinds of Jobs Pay a $65,000 Salary?

If you’re looking for work, you’ll likely find there’s a wide range of jobs that offer a $65,000 salary, including entry-level positions for new grads, jobs for introverts, and high-paying vocational jobs that don’t necessarily require a degree. According to the BLS, jobs for health-care workers, software developers, clergy, law clerks, civil and industrial engineering technicians, and many more fall within this pay range, although salaries can vary significantly depending on where you live.

Tips for Living on a $65,000 Salary

Proactive planning can play an important role in living well on a $65,000 salary. Here are a few steps that could help make your money go further month to month and year to year:

Live Within Your Means

Before you make a major purchase, consider crunching the numbers again to make sure the costs will work with your budget.

Pay Down Debt

If you’re carrying a balance on your credit cards and paying anywhere near the average interest rate (currently 27.65%), a big chunk of your paycheck could end up going just toward interest each month. If you’re struggling with high-interest debt, you may want to look into debt consolidation or a repayment plan like the snowball method to help you get back on track.

Save and Invest

Finding a way to save for retirement and other long-term goals can seem like a big ask if you’re struggling to make ends meet. But the sooner you can start stashing away money, the more your savings can start to grow.

Keep an Eye on Costs

Tracking your spending with an app can help you see where your money is going in real time, which could make it easier to stick to your budget. It also can be a good idea to check your online credit card and bank statements weekly or monthly.

The Takeaway

Is $65k a year a good salary? Though it may not qualify as “rich,” in many parts of the country, a $65,000 salary is higher than the average pay in the United States. And it can provide a comfortable lifestyle — especially if you’re single. The idea of living day to day within your means on $65,000 while also working toward your long-term goals may seem challenging. But having the right attitude, discipline, and financial tools can improve your chances of success. Creating a budget that you can stick to can be an important first step.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

See exactly how your money comes and goes at a glance.

FAQ

Can I live comfortably making $65,000 a year?

If you’re earning $65,000 a year, you’re making more than the median salary for U.S. workers nationwide. How well you can get by on that pay depends on where you live and how you spend your money.

What can I afford with a $65,000 salary?

If you’re single, you can decide your own spending priorities. The 50/30/20 budget rule — which breaks down your costs and how much you may want to put toward your wants, needs, and savings each month — can be a useful tool for deciding what you can afford on a $65,000 salary.

How much does a $65,000 a year salary come out to hourly?

A $65,000 annual salary comes out to about $31.25 per hour if you’re working a 40-hour work week.

If you make $65,000 a year, how much does that come out to monthly?

If you’re earning $65,000 a year, that comes to about $5,417 per month before taxes.

How much does a $65,000 annual salary come out to per day?

If you’re earning $65,000 a year, that comes to about $1,250 for a 40-hour work week, or $250 for an eight-hour workday.

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Photo credit: iStock/mixetto

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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.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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.

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