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The median home sales price in the U.S. was nearly $417,000 in the first quarter of 2025, so it’s not uncommon for first-time homebuyers to find themselves in this price range. The answer to the question “how much down payment do I need for a $400,000 house?” can vary based on the type of home loan and your creditworthiness as a borrower.

Here’s a closer look at how first-time buyers can afford a $400K house, from the down payment to mortgage preapproval and what you can expect for monthly mortgage payments.

How Much Income Do I Need to Afford a $400K Home?

The income you’ll need to afford a $400,000 home goes beyond saving up for a down payment. Rather, it’s about your ability to afford the monthly mortgage payment. How much you’ll pay each month depends on whether you pay private mortgage insurance (PMI), the interest rate, and other factors.

Many financial experts suggest spending no more than 30% of your gross monthly income on housing costs. Using this budgeting rule, let’s crunch the numbers with a mortgage payment calculator on what income you’ll need to afford a $400,000 home purchase without overextending your finances.

For example, let’s say you made a 3% down payment of $12,000 on a $400,000 house, which could be possible when buying your first home, depending on your qualifications. Let’s also assume that you take out a 30-year home loan at a 7.00% interest rate. That would amount to about $2,580 for a monthly mortgage payment. To reasonably afford this, you’d need to earn $8,600 per month. In other words, that’s an annual income of around $103,000. This assumes you don’t have any debts beyond your home loan payment.

Also note that this estimate does not include PMI, property taxes, and other costs of homeownership. When crunching the same numbers with a mortgage calculator with taxes and insurance, the monthly payment comes closer to $3,100. This would mean earning $10,300 a month ($123,600 per year) to comfortably afford payments on a $400,000 home.

Calculating home affordability also involves factoring in your existing debts, such as student loans and auto loans, plus other cost of living expenses.

Recommended: Average Monthly Expenses for One Person

How Much Is the Down Payment for a $400K House?

Conventional wisdom suggests putting a 20% down payment on a home. Though this helps avoid paying PMI, you may be eligible to put as little as 3% down if you qualify as a first-time homebuyer. Considering these as the two ends of the spectrum, a down payment for a $400,000 house could range from $12,000 to $80,000.

Homebuyers have other upfront expenses to account for when determining how much house they can afford. Notably, closing costs typically add up to 2% to 5% of a home purchase price. There may also be home renovation and moving costs to include in your home-buying budget.

What Are the Down Payment Options for a Home Worth $400K?

How much down payment do you need for a $400,000 house? Here are your potential down payment options depending on the type of mortgage loan you apply for.

•   With any mortgage, putting 20% down means not having to pay PMI, which costs 0.5%-1.5% of the home loan amount each year. A 20% down payment is most common with a conventional mortgage, and would amount to $80,000 for a $400,000 home.

•   Qualified first-time borrowers could secure a conventional mortgage with a down payment of as little as 3%, amounting to $12,000 in this example. Other buyers may need to fork out 5%, or $20,000, to qualify. Down payment assistance programs can help some first-time buyers, veterans, and other eligible applicants afford a down payment on a home.

•   With a government-backed FHA loan, first-time homebuyers could make a down payment of just 3.5%, or $14,000 for a $400,000 house. Borrowers need a credit score of 580 or higher to qualify for this minimum down payment. (You might also get an FHA loan with a score of 500 to 579, but a 10% down payment would be necessary.)

•   Other government-backed loans, including VA loans and USDA loans, may not require any down payment to qualify, though putting some money down can help build equity and secure a more competitive rate.

Recommended: Best Affordable Places in the U.S.

What Does the Monthly Mortgage Payment Look Like for a $400K Home?

To recap, your monthly mortgage payment is determined by several factors. The interest rate you qualify for is based on your credit score, debt-to-income (DTI) ratio, and other personal financial information. How much money you put down and the length of the loan term — typically 15 or 30 years — also has an impact on the monthly mortgage payment for a $400,000 home.

If you put $12,000 toward a $400,000 home with a 30-year fixed-rate mortgage at 7.00%, you can expect a monthly payment of $2,580. Upping the down payment to 5% or 10%, would cut the monthly payment to around $2,528 and $2,395, respectively. On the other hand, locking in a better interest rate, say 6.50%, would lower a monthly payment from $2,580 to $2,452, using the first example with a 3% down payment.

Your mortgage payments will go toward the loan interest and principal, with a greater share going toward interest during the initial part of the loan term. Making additional payments on the loan principal each month is one strategy for saving on interest and shortening repayment.

What to Do Before You Apply for a $400K Mortgage

Buying a home is often the largest purchase in one’s lifetime and home expenses are a major contributor to the cost of living in the U.S. If time allows, there are some steps you can take to improve your borrower qualifications and secure more favorable loan terms.

Paying off existing debts, especially high-interest debts, can reduce your DTI ratio and the perceived risk for lenders to issue you a mortgage. Having a DTI ratio of 36% or less is preferred, though borrowers may qualify with a higher DTI ratio. Building up more savings toward a down payment and closing costs can also enhance your chances of approval, plus reduce stress on you and your finances.

Should I Get Preapproved Before Applying for a Mortgage?

Home buying can be competitive, so it’s helpful to demonstrate that you’re a serious buyer by getting preapproved before making an offer. The mortgage preapproval process involves submitting documentation about your income and assets. Lenders will evaluate your credit and financial history, too.

If you get preapproved, lenders will provide a letter listing the specific loan amount and interest rate you’re preapproved for. This is not a commitment, and it’s typically only valid for up to 90 days.

How to Get a $400K Mortgage

Applying for a mortgage is a fairly straightforward process that can be done online or in person. The applications require many of the same materials you’d have already gathered for mortgage preapproval, plus information on the property you’re intending to purchase.

It’s important to compare lender offers and find the best mortgage terms before applying. As noted above, a slight change in the interest rate can significantly lower monthly payments and the total interest paid over the life of the loan. Remember, though, that if you aren’t overjoyed with your original interest rate, a mortgage refinance can be an option down the road.

The Takeaway

How much down payment do you need for a $400,000 house? You could put as little as $12,000, or up to $80,000, toward a down payment depending on the type of home loan, your creditworthiness, and whether you’re a first-time buyer. It’s also possible to get a home loan with zero money down.

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 should I make to afford a $400,000 house?

If you follow the 30% rule, which says your housing costs shouldn’t exceed 30% of your gross income, you should make at least $103,000 a year to afford a $400,000 house, assuming a 3% down payment and 7% interest rate on a 30-year fixed rate mortgage. Borrowers with more saved for a down payment could potentially afford a $400,000 house with less income. Those with other debts will need a greater income.

What credit score is needed to buy a $400,000 house?

Credit score requirements to buy a $400,000 house depend on the type of home loan. FHA loans require a minimum credit score of 500, whereas borrowers usually need a 620 credit score to qualify for a conventional mortgage.

How much is a $400K mortgage per month?

The monthly payment on a $400K mortgage depends on the interest rate you qualify for and loan term. A low interest rate of 5.50% could mean a payment of about $2,300 per month, while a higher interest rate of 7.5% could see monthly payments of $2,800. The added cost of homeowners insurance, property taxes, and mortgage insurance could further increase the monthly payment.

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Photo credit: iStock/DragonImages

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
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.

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.
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.

SOHL-Q225-143

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Buying a $600,000 home is exciting, but you may have a lot of questions about the process, especially if you’re a first-time homebuyer. How much is the down payment for a $600,000 house, for instance, and what income do you need to afford your mortgage payments? There’s no one-size-fits-all answer, but first-time buyers usually need to put down at least 3% for a conventional mortgage. Making a 20% down payment will help you avoid private mortgage insurance (PMI) and reduce the size of your loan. Here’s a closer look at the financials, so you know what to expect when it comes to purchasing a $600,000 home.

How Much Income Do I Need to Afford a $600K Home?

When considering how much you need to afford a $600,000 home, the 28/36 rule can help. This guideline suggests spending no more than 28% of your gross income on housing costs and no more than 36% on all your debt payments combined.

Let’s say, for example, that you put a 20% down payment on a $600,000 home. If you chose a 30-year mortgage with a fixed rate of 6.63%, your monthly principal and interest charges on your home loan would be $3,075. Following the 28/36 rule, your gross monthly income should be around $131,800 to afford these bills.

However, your monthly housing costs will be even higher when you account for property taxes and homeowners insurance. Factor in these costs and you’ll likely need an annual income closer to $165,000. The cost of living in the U.S. varies significantly, so factor in costs in your specific location when making this calculation. You may get by with a lower income in one of the best affordable places in the U.S.

If you make a down payment of less than 20%, you’ll have higher monthly housing costs. Along with paying off a larger mortgage, you’ll have to pay for private mortgage insurance (PMI) for a certain amount of time, which typically costs about 0.58% to 1.85% of the loan amount.

How Much Is the Down Payment for a $600K House?

The down payment for a $600,000 house varies depending on the type of mortgage loan you choose. Options include conventional mortgages, FHA loans (backed by the Federal Housing Administration), and others. Take a look at how the loans differ:

Loan Type	Minimum Down Payment	Amount on the $600,000 home
Conventional home loan with PMI (lowest rate is typically for first-time homebuyers)	3% -5%	$18,000 – $30,000
Conventional home loan with no PMI	20%	$120,000
FHA loan (for credit score of 580 or higher)	3.5%	$21,000*
FHA loan (for credit score of 500 – 579)	10%	$60,000*
VA loan (backed by the U.S. Department of Veterans Affairs)	0%	$0
United States Department of Agriculture (USDA) loan	0%	$0

*In much of the U.S., the FHA loan limit for a single-family home in 2025 is $524,225. The limit for a two-family home is $671,200. Some markets have higher limits; consult a lender.

What Are the Down Payment Options for a Home Worth $600K?

Conventional home loans are the most common type of mortgage, and you can find them from banks, credit unions, and online lenders. The minimum down payment requirement can be quite low at 3% (for first-time buyers) or 5%, but you’ll need to put down at least 20% to avoid PMI charges.

First-time homebuyers may also consider FHA loans. These loans can be appealing to borrowers with weak credit who might have trouble qualifying for a conventional mortgage. You’ll need to put down 3.5% or 10%, depending on your credit score.

VA and USDA loans offer 0% down payment options. VA loans are available to eligible veterans, servicemembers, reservists, and surviving spouses, while USDA loans are designed for low- and moderate-income individuals who are buying a home in a rural area.

If you decide to finance a home at a much higher price point someday, you might also explore a jumbo loan, which offers up to $3 million.

Recommended: What Is a Mortgage Refinance?

What Does the Monthly Mortgage Payment Look Like for a $600K Home?

Your monthly mortgage payment on a $600,000 home depends on your down payment amount and interest rate. Here’s what you could expect your monthly principal plus interest payments to look like with different down payment amounts based on current rates:

Down payment percentage	Down payment amount	Monthly payments on 30-year mortgage with 6.63% rate	Monthly payments on 15-year mortgage with 5.63% rate
5%	$30,000	$3,651	$4,697
10%	$60,000	$3,459	$4,450
15%	$90,000	$3,267	$4,202
20%	$120,000	$3,075	$3,955

If you choose an adjustable-rate mortgage when buying your first home, your payments will fluctuate over time. ARMs often start out with lower interest rates than fixed-rate mortgages, but they can increase over time. Some have a 5/1 structure, meaning you pay a fixed rate for five years, after which the rate can be adjusted up or down.

What to Do Before You Apply for a $600K Mortgage

Before applying for a $600,000 mortgage, take these steps to boost your chances of approval.

•   Work on your credit score: Your credit score plays a key role in the mortgage approval process, as well as the interest rate you get. Paying down debts and keeping your credit utilization low can help increase your score. It’s also worth checking your credit report for errors.

•   Pay off debt: Paying down your debts can lower your debt-to-income ratio, which is an important factor when applying for a mortgage. Having more room in your budget will make it easier to qualify for a $600,000 home loan. You may also consider reducing your cost of living.

•   Avoid taking out new loans: Taking out a loan or opening a new credit card can incur a hard credit inquiry, which can affect your credit score. This activity could be a red flag for lenders.

•   Save for your down payment: As you prepare to apply, keep saving up for your down payment and closing costs. The higher your down payment, the smaller your loan and monthly mortgage costs. You can also explore down payment assistance programs.

Should I Get Preapproved Before Applying for a Mortgage?

Getting preapproved is a smart step in the home-buying process. When you apply for preapproval, lenders will review your finances in detail and make a conditional offer for a mortgage. That way, you can see if you qualify as a first-time homebuyer and for what size loan.
This will give you a clear picture of how much you can afford based on your credit, income and other factors. Providing a preapproval letter with your offer can show sellers that you’re a serious, qualified buyer.

Although the mortgage preapproval process doesn’t guarantee your mortgage just yet, it does show you’re likely to get your loan amount, as long as your circumstances stay the same.

Recommended: Average Monthly Expenses for One Person

How to Get a $600K Mortgage

A $600,000 mortgage is a relatively large amount, as the median home price in the U.S. is around $415,000. With the right preparation, though, you may get approved for a mortgage of this size. These are important steps to take.

1.    Review your finances: Lenders look closely at your credit, income, and debt-to-income ratio when you apply for a mortgage. (Your DTI is your total monthly debts divided by your gross monthly income.)

2.    Compare mortgage options: Most homebuyers opt for a conventional mortgage, but you can also explore FHA loans, VA loans, and USDA loans to see if any of these options are right for you.

3.    Prequalify with multiple lenders: Getting prequalified is a quick process that will give you a sense of whether you can qualify for a $600,000 mortgage, as well as your interest rate. The Consumer Financial Protection Bureau recommends comparing offers from at least three lenders.

4.    Apply for preapproval: Preapproval goes a step beyond prequalification, as lenders collect documentation and review your finances in detail. You could get preapproved with multiple lenders or one lender, depending on your timeline.

5.    Submit your full mortgage application: Once a seller has accepted your offer on a home, you can finalize your mortgage application. You’ll provide any outstanding documentation, such as bank statements and W-2s. The lender will order an appraisal on your home and work on underwriting your loan.

The Takeaway

Before making the leap into homeownership, make sure you understand how much of a down payment and income you’ll need to afford your monthly bills. Buying a $600,000 home is a big commitment, so review your finances as you prepare for this milestone.

If you’re ready to take the next step, SoFi offers competitive mortgage rates and helpful tools to guide you through the homebuying process. Learn more about your options with SoFi.

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 should I make to afford a $600,000 house?

To cover your costs on a $600,000 house, you’ll probably need an annual pretax income of around $165,000, although each homebuyer’s costs are different. The amount of income you need to afford a $600,000 house depends on your monthly mortgage payments, which vary based on your down payment amount, interest rate, and property taxes. Experts generally recommend spending no more than 28% of your gross monthly income on housing costs.

What credit score is needed to buy a $600,000 house?

You typically need a credit score of at least 620 to qualify for a conventional mortgage, but a score of 700 or higher will help you land a better interest rate. Borrowers with lower credit scores could consider applying with a cosigner or pursuing an FHA loan. With an FHA loan, qualified buyers could have a credit score as low as 500.

How much is a $600K mortgage per month?

The monthly payments on a $600,000 mortgage will depend on your interest rate and loan term. Assuming a 30-year term, the monthly principal and interest costs would range from around $3,600 to $4,000 depending on rate and term.

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Photo credit: iStock/monkeybusinessimages

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
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.

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.
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.

SOHL-Q225-144

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We often hear that you should put 20% down when purchasing a home. That means the down payment for a $250,000 house would be $50,000. But not everyone has that much cash lying around.

Luckily, nowadays you can get a conventional mortgage by putting significantly less money down. In fact, some first-time homebuyers can buy a house with as little as 3% down. For a $250,000 home, that’s only a $7,500 down payment. And if you qualify for a VA loan (backed by the U.S. Department of Veterans Affairs), you may be able to purchase a $250,000 house with 0% down. Even better: Anyone who hasn’t owned a primary residence in the last three years is usually considered a first-time buyer.

Below, we’ll explore how to calculate the down payment on a $250,000 house, plus what you should budget for monthly mortgage payments and how to get approved for the mortgage.

How Much Income Do I Need to Afford a $250K Home?

On average, you’ll need to earn about $76,000 before taxes to afford a $250,000 home, but this can vary significantly. Why? How much income you need for a $250K house depends on several factors, including your other debts, your credit score, the length of the home loan, property taxes, homeowners insurance costs, and other fees:

•   Other debts: Lenders don’t look purely at your income when deciding to approve you for a mortgage; rather, they look at your income in relation to your debts. Typically, you need a debt-to-income ratio of 36% or less to qualify for a mortgage, but this can vary by lender. If you have significant debts (credit cards, student loans, auto loans, etc.), you’ll need to make more money to ensure you meet a lender’s DTI requirements.

•   Your credit score: Your credit score impacts your interest rate. A lower credit score means a higher interest rate — and a higher monthly payment to budget for.

•   The length of the loan: A 30-year loan term means your mortgage is spread out over 360 payments, which makes them smaller and more manageable on a lower income. However, if you get a 15-year mortgage, your monthly payments will be considerably larger, meaning you’ll need a higher income to afford them.

•   Property taxes: In addition to paying back your loan, you’ll also have to pay property taxes every year. Make sure you factor in these taxes when calculating how much money you need to make to afford a $250,000 home.

•   Homeowners insurance costs: You aren’t just budgeting for the cost of the house. You also need to think about the cost of living in general. You’ll need to leave room in your budget for the homeowners insurance you’ll have to carry, for example. The cost of homeowners insurance depends on factors such as where you live and the size of your home.

•   Other fees: Some lenders roll certain loan fees (such as appraisal fees and closing costs) into the mortgage. If you opt for a lender that does so, it can increase your monthly loan payment.

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

How Much Is the Down Payment for a $250K Home?

The down payment on a $250,000 home depends on the type of mortgage loan you get. Traditionally, experts recommend putting 20% down ($50,000 for a $250,000 home); this is ideal for a conventional mortgage, as putting 20% down means you don’t need to pay for private mortgage insurance (PMI).

However, not everyone can afford to put 20% down. Here’s a look at various mortgage types and the minimum down payment on a $250,000 home for those who qualify as a first-time homebuyer:

•   Conventional mortgage: As low as 3% to 5% ($7,500 to $12,500)

•   FHA (Federal Housing Administration) loan: As low as 3.5% ($8,750) for buyers who meet credit score requirements

•   VA loan: As low as 0% for qualifying borrowers and homes

What Are the Down Payment Options for a Home Worth $250K?

The down payment options for a $250,000 home are varied, from as little as 0% down through a VA loan to as much as 100% (i.e., paying cash for the house). Which option you choose depends on how much you have saved up and the type of home loan you’re applying for.

Here are a few things to keep in mind:

•   FHA loans: You can qualify for a government-backed FHA loan with as little as 3.5% down. However, the credit score needed to buy a house with a mortgage through the Federal Housing Administration is 580. You may be able to qualify with a lower credit score, but you have to put at least 10% down (that’s $25,000 for a $250,000 home).

•   PMI: If you don’t want to pay private mortgage insurance on your conventional mortgage, you need to put at least 20% down ($50,000). That said, you might be able to qualify with as little as 3% down, although in that case PMI will be part of the deal.

•   Monthly payments: The larger your down payment on a $250,000 home, the smaller your monthly payment will be.

What Does the Monthly Mortgage Payment Look Like for a $250K Home?

There’s no one single monthly mortgage payment you should expect for a $250,000 home, as it depends on several key factors, such as the interest rate, how much money you put down, property taxes and homeowners insurance (which are often added to the monthly mortgage bill), and the loan term.

The table below shows some estimated payments based on how much is the down payment for a $250,000 house, the length of the loan, and the interest rate — but these are examples only. You can use a mortgage calculator to estimate the more exact monthly mortgage payments for a $250,000 home based on your unique situation. Remember that if you purchase at one interest rate, you can always do a mortgage refinance if rates drop significantly.

Down payment	Fixed interest rate	Loan term	Monthly payment
$0	6.00%	15 years	$2,155
$0	7.00%	30 years	$1,699
$7,500	6.00%	15 years	$2,046
$7,500	7.00%	30 years	$1,532
$25,000	6.00%	15 years	$1,898
$25,000	7.00%	30 years	$1,496
$50,000	6.00%	15 years	$1,687
$50,000	7.00%	30 years	$1,330

What to Do Before You Apply for a $250K Mortgage?

Before applying for a $250,000 mortgage, focus on getting your finances in order. Here are a few ways to improve your approval odds and keep the monthly payment affordable:

•   Pay down existing debts: Reducing other debts can help boost your credit score and lower your DTI ratio. These both improve your approval odds and make it easier to afford a monthly mortgage payment.

•   Save money: Open a high-yield savings account and start saving up for a down payment. The more you save for a down payment, the lower your monthly mortgage payment will be.

•   Get preapproved: When you’re ready to start shopping, seek preapproval for your max budget (such as $250,000). Going through this process will give you a pretty solid idea of what you can afford.

Recommended: Average Monthly Expenses for One Person

Should I Get Preapproved Before Applying for a Mortgage?

Getting preapproved is helpful in many ways:

•   Completing the mortgage preapproval process will let you know whether you’re likely to be approved for the cost of the house you want to purchase. If $250,000 is the top of your budget, see if a lender will be willing to lend you that amount (with the down payment you’re willing to pay).

•   Mortgage preapprovals signal to sellers that your offer is legitimate and can help you get your offer accepted, particularly if the housing market is competitive.

Just remember that preapproval is different from prequalification. A preapproval involves a hard credit check, so only get a preapproval if you’re serious about buying and plan to make an offer soon. A lender can tell you how long a preapproval is good for before you apply.

How to Get a $250K Mortgage

Here’s how to get a mortgage for a home priced around $250,000. In fact, these basic guidelines hold true whether you need a modest mortgage or a jumbo loan:

1.    Figure out your finances: Make sure you have enough money for the down payment, and look into down payment assistance programs if necessary. Focus on improving your credit score before searching for lenders.

2.    Research lenders: Compare several lenders (both online and in person) to see which has the lowest rates and fees.

3.    Apply for preapproval: You can likely do this over the phone or online. You’ll need to upload a fair amount of documentation, including pay stubs, tax returns, proof of identification, bank statements, and more.

The Takeaway

The down payment for a $250,000 house depends on the type of mortgage you’re applying for — and the monthly mortgage payment you’re comfortable making. But some first-time homebuyers can get approved for as little as 3% down (that’s $7,500 on a $250,000 house). Finding a mortgage lender with a competitive interest rate and low fees can also keep your costs down.

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 should I make to afford a $250,000 house?

The amount of money you should make to afford a $250,000 house depends on several factors, including your other debts, your credit score, the cost of homeowners insurance and property taxes, and the size of your down payment. That said, a salary of around $76,000 a year will help you afford a $250,000 mortgage.

What credit score is needed to buy a $250,000 house?

The credit score needed to buy a house worth $250,000 depends on the type of mortgage you are applying for. Conventional mortgages often require a credit score of 620 or higher. You can qualify for an FHA loan with a score as low as 500 if you put 10% down. VA loans require a minimum credit score of 620. USDA loans usually require a credit score of 640.

How much is a $250K mortgage per month?

The monthly mortgage cost for a $250,000 home loan can vary greatly, depending on the size of the down payment, the interest rate, the length of the loan term, property taxes, and homeowners insurance costs. Budget anywhere from $1,000 to $2,000 a month, though in some cases, it could be even higher or lower.

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Photo credit: iStock/Valentyna Yeltsova

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
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.

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.
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.

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Online lenders can make applying for and securing a personal loan easier than working with traditional lenders. The process of getting a lump sum of cash to use however you wish can be fast, affordable, and convenient. However, there may be some times that a traditional lender is a better option. Learn the full story here.

Convenience

The convenience factor is one of the biggest advantages of getting an online personal loan. Younger generations of consumers might be drawn to a process that incorporates the technology they’ve grown up with and are comfortable using. But online lenders often have a streamlined application process that might appeal to people of any generation who are comfortable with technology.

Online loan applications can be completed from anywhere a prospective borrower has an internet connection, preferably secure. In addition, online lending websites often have thorough lists of Frequently Asked Questions (FAQs) to give consumers as much information as possible without the need to travel to a brick-and-mortar bank branch.

Competitive Rates

The lack of brick-and-mortar locations is one key reason why online lenders can often offer competitive rates on personal loans. Without physical bank branches to maintain, their overhead is likely to be less than a traditional bank’s.

Some online lenders, however, may try to generate profits by charging fees, such as those for paying off a loan early. When shopping around for personal loan rates, you’ll want to be sure to compare annual percentage rates (APRs), which includes any fees. This allows you to compare loans apples to apples.

Recommended: APY vs Interest Rate

Quick Turnaround

Some online lenders are able to offer preapproval to prospective borrowers with just a soft inquiry on their credit report that won’t affect their credit score. One benefit of knowing quickly what rate might be offered is being able to compare rates among multiple lenders to find the one that will be the best fit.

After the application and loan approval, some online lenders distribute loan funds in as quickly as one to a few days. You may even see some lenders advertising same-day approval and disbursement. For people who need access to funds quickly, this could be the determining factor in choosing a lender.

Recommended: What to Know Before You Borrow Money Online

Differing Criteria

Someone who has not built a credit history might have difficulty being approved for a personal loan. Some online lenders, however, are willing to look at factors other than credit score in determining approval for a personal loan and may have more flexible qualification criteria than a traditional bank.

There are also some online lenders that cater specifically to underserved populations.

Recommended: Typical Personal Loan Requirements Needed for Approval

What About Traditional Banks?

Even though online lenders are well established in the financial world, traditional banks still make sense for some people or some financial needs.

For people who prefer working with a lender in person, a traditional bank or a credit union can be a good choice. If there is already a relationship in place with a particular financial institution, it may be advantageous to build on that and get a personal loan rate quote from that lender.

In some situations, a personal line of credit (LOC) might be a better option than a personal loan. Though online lenders are beginning to offer LOCs, they are more likely to be offered by banks or credit unions.


💡 Quick Tip: Choosing a personal loan with a fixed interest rate makes payments easy to track and gives you a target payoff date to work toward.

From Disrupting to Redefining

Online lenders and traditional financial institutions are realizing that they can meet the needs of more consumers if they work together. Today’s modes of banking may be less about disrupting the status quo of lending and more about finding a new definition of banking as a whole.

Recommended: Guide to Unsecured Personal Loans

The Takeaway

If you’re thinking about taking out a personal loan, the great news is that you have plenty of lenders to choose from, including traditional banks, credit unions, and online lenders. Some people may prefer the in-person experience of working with a traditional bank or credit union. Others may find that online personal loans can make it easy to rate-shop and typically offer a quick and convenient application process. Online lenders also tend to be faster to fund than traditional institutions.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

SoFi’s Personal Loan was named NerdWallet’s 2024 winner for Best Personal Loan overall.

FAQ

Is it better to apply for a personal loan online or in person?

It’s a matter of personal choice whether to apply for a personal loan in person or online. Some people may prefer the face-to-face interaction and support of applying in person. Others may like the speed and convenience of applying online.

What are the cons of online lenders?

Some people may feel the cons of online lenders include having to share sensitive financial information online and not having in-person support.

How long does it take to get an online personal loan?

Online personal loans can often be obtained in just a day or two. Some lenders even advertise same-day approval and disbursement.

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About the author

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SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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 .

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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Consumer debt refers to any money you borrow for personal, family, or household purposes. It includes credit card debt, student loans, auto loans, mortgages, personal loans, and payday loans.

White “debt” can have negative connotations, having consumer debt isn’t necessarily a bad thing. Borrowing money allows you to achieve your goals, such as buying a house or going to college. However, consumer debt can become a burden if you borrow too much or for the wrong reasons.

Unfortunately, many Americans are currently saddled with high levels of debt. Total consumer debt hit a new record in the first quarter of 2025, ringing in at $18.203 trillion according to the New York Fed’s quarterly Household Debt and Credit Survey (HHDC). The average total consumer household debt, according to Experian, was $105,056 in 2024, a 13% uptick from 2020.

Here, take a closer look at the different types of consumer debt, including how each can help — or hurt — your finances, plus how to pay off high levels of consumer debt.

What Is Consumer Debt?

Consumer debt, as its name implies, is debt held by consumers, meaning private individuals as opposed to governments or businesses. It includes debts you may already have or might seek in the future — credit cards, student loans, auto loans, personal loans, and mortgages. It doesn’t include business loans or lines of credit or business credit cards.

Consumer debt products are offered by banks, credit unions, online lenders, and the federal government. They generally fall into two major categories: revolving debt and non-revolving debt.

With revolving debt, you repay your debt monthly (credit cards are a prime example). With non-revolving debt, you receive a loan in one lump sum and then repay it in fixed payments over a defined term. Non-revolving credit typically includes auto loans, student loans, mortgages, and personal loans.

Consumer debt can also be broken down into secured vs unsecured debt. Secured debt is debt backed by an asset (such as a home or car) used as collateral. If the loan isn’t paid back, the lender has the option to seize the asset. Unsecured debt, on the other hand, does not require collateral. The lender simply relies on the borrower’s ability to repay the loan.

The Different Types of Consumer Debt

Consumer debts vary widely in terms of how they work, their terms, and their impact on your financial well-being. Here a closer look at some of the most common types of consumer debt.

Mortgage Debt

Mortgage debt is the most common (as well as the largest) type of debt in the U.S. This type of consumer loan is used to purchase a home and the home is used as collateral.

Mortgages are installment loans, which means you pay them back in a set number of payments (installments) over the term of the loan, typically 15 or 30 years. Mortgage interest rates are usually lower than other types of consumer loans, and the interest may be tax deductible if you itemize your taxes.

If you make your payments on time, a mortgage can have a positive impact on your credit profile, since it shows you are a responsible borrower. If you stop making payments on a mortgage, however, it can negatively impact your credit. Plus, the lender can begin the foreclosure process, which typically includes seizing the property and selling it to recoup its losses.

Student Loan Debt

Student loans are unsecured installment debt used to pay for education expenses, such as tuition and room and board. They are offered by federal or private lenders and issued in one lump-sum payment. The borrower is then responsible for making repayments in regular amounts, typically after they graduate or are no longer in school.

Student loans are often one of the first debts consumers take on and can be an important way to build a positive credit history, provided you make on-time payments. Interest rates vary by lender. If you get a student loan from the U.S. Department of Education, the interest rate is set by the federal government and will remain fixed over the life of the loan.

Depending on your income, interest paid on student loans may be tax-deductible up to certain limits.

Auto Loan Debt

Auto loans are secured installment loans used to purchase a vehicle. These loans can have varying terms and interest rates, and the vehicle serves as collateral for the loan. You can get an auto loan through a bank or through a lender connected with a car dealership.

Unlike a house, a car depreciates in value over time. As a result, you, ideally, only want to take out financing for a vehicle if you can get a low interest rate. Some car companies offer low- or no-interest financing deals for individuals with good credit.

You get the proceeds of an auto loan in one lump sum then repay that amount, plus any interest, in a set number of payments (typically made monthly) over an agreed-upon period of time, often three to six years. If you stop making payments, the lender can repossess your car and sell it to get back its money.

Like other types of consumer loans, making on-time payments on your auto loan can help you build a positive credit history.

Personal Loans

Personal loans are consumer loans that individuals can use for a wide variety of purposes, such as debt consolidation, home improvements, or emergency expenses. You can get a personal loan with an online lender, bank, or credit union. They typically have fixed interest rates and set repayment terms, often one to seven years.

Personal loans are typically unsecured, meaning you don’t need to provide any collateral. Instead, lenders look at factors like credit score, debt-to-income ratio, and cash flow when assessing a borrower’s application.

Once approved for a personal loan, you receive a lump sum (which can be anywhere from $1,000 to $50,000, $100,000, or more) and start paying it back, plus interest, in fixed monthly payments over the loan’s term. On-time loan payments can help build your credit, but missed payments can damage it.

Recommended: Typical Personal Loan Requirements Needed for Approval

Credit Card Debt

Credit card debt arises from using credit cards to make purchases or cover expenses. This type of debt is revolving, meaning you don’t have to pay it off at the end of the loan term (usually the end of the month). If you carry a balance from month to month, you pay interest on the outstanding amount.

Credit card debt is an unsecured loan, since it isn’t tied to a physical asset the lender can repossess to cover the debt if you don’t pay your bills. Interest rates vary depending on the card, your credit scores, and your history with the lender, but currently average around 24%.

To remain in good standing, you’re required to make a minimum payment on your balance each month. However, only paying the minimum allows interest to accrue, which can make the debt increasingly harder to pay off. As a result, credit card debt is often the most problematic type of debt for consumers.

A long history of making on-time payments can have a positive impact on your credit profile, while missing and late payments (and using a large amount of your available credit line) can have a negative impact on your credit.

Payday Loans

Payday loans are a type of short-term credit offered to consumers looking to get access to cash fast. Generally, these loans are for relatively small amounts of money ($500 or less) and must be repaid in a single payment on your next payday, hence the name. Payday loans are typically available through storefront payday lenders or online.

Although these fast-cash offers can be tempting, the high cost associated with them make them a last resort. A typical two-week payday loan will charge $15 for every $100 you borrow, which is the equivalent of a whopping 400% annual percentage rate (APR).

Generally, payday loans are not reported to the three major consumer credit bureaus, so they are unlikely to impact your credit scores.

Pros and Cons of Consumer Debt

There are both benefits and drawbacks to consumer debt. Here’s a look at how they stack up.

Pros of Consumer Debt

•   Access to immediate funds Consumer debt allows individuals to make large purchases (like a home or car) or cover expenses (like a college education) when they do not have the necessary cash on hand.

•   Building credit history Responsible borrowing and timely repayments can help establish and build an individual’s credit history and credit score.

•   Emergency financial support Consumer debt, such as a personal loan, can provide a safety net in unexpected situations when someone needs funds immediately.

Cons of Consumer Debt

•   High interest rates Many forms of consumer debt, such as credit card debt or payday loans, carry high interest rates, making them costly in the long run.

•   Risk of overborrowing Without careful financial planning, consumer debt can lead to excessive borrowing, making it difficult to manage monthly payments and potentially causing financial stress.

•   Negative impact on financial goals Excessive consumer debt can hinder individuals from achieving long-term financial goals, such as saving for retirement or buying a home.

Getting Out of Consumer Debt

To get out from under unhealthy levels of consumer debt, consider the following steps:

•   Assess your debts You might start by making a list of all your debts, noting balances, interest rates, and minimum monthly payments. This will allow you to see where you stand and make a plan for debt repayment.

•   Create a budget Next, you’ll want to assess your average monthly income and expenses to determine how much you can allocate towards debt repayment each month. At the same time, you may want to look for ways to cut back on nonessential spending; any funds you free up can go towards extra payments.

•   Prioritize repayment If you have multiple high-interest debts, you may want to focus on paying off the highest-interest debt first, while making minimum payments on other debts. Or, you might focus on repaying the debt with the smallest balance, making minimum payments on all your debts. Once that is paid off, you move on the next-highest balance.

•   Explore debt consolidation options Consider consolidating multiple debts into a single loan to simplify repayment and, ideally, save money. One way to do this is through a debt consolidation loan, a personal loan that may come with lower interest rates than your existing debts.

•   Negotiate with creditors Another option is to reach out to your creditors to see if you can negotiate lower interest rates, extended payment terms, or possible debt settlement options.

•   Seek professional help if needed If you are struggling with debt, you may want to consult a nonprofit credit counseling service. Credit counselors help you go over your debts to devise a plan for repayment, and they can also help you with budgeting and other personal finance basics.

The Takeaway

Consumer debt is debt you take on for personal, rather than business, reasons. But all consumer debt is not created equal. Some debts, such as mortgages or student loans, can be characterized as “good” debts, since they can benefit your long-term financial health. Other debts, like high-interest credit card debt or payday loans, on the other hand, can be considered “bad debts,” since they can put your financial health at risk.

If you’re having trouble paying off your consumer debts, you may want to consider debt consolidation. With a low fixed interest rate on loan amounts from $5K to $100K, a SoFi personal loan for debt consolidation could substantially lower how much you pay each month. Checking your rate won’t affect your credit score.

See if a personal loan from SoFi is right for you.

FAQ

What is considered consumer debt?

Consumer debt is debt taken on for personal consumption vs. business or investment needs. It can include such things as credit card debt, student loans, mortgages, car loans, and personal loans.

Is a credit card a consumer loan?

No, a credit card is a revolving line of credit. A loan typically involves receiving a lump sum of cash and paying it back over time.

Is a credit card considered debt?

Yes, a credit card is a kind of debt. With a credit card, you are borrowing money from the card issuer to make a purchase. You then pay back the amount of the purchase, possibly plus interest and fees.

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SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., Puerto Rico, U.S. Virgin Islands, or American Samoa, and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 4/22/2025 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

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 .

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.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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