How Much Do You Need to Make to Afford a $5,000 Mortgage Payment?

Do you earn enough each month to afford a $5,000 mortgage payment? That amount might sound steep, but such a payment isn’t unusual depending on where you buy. 

According to Zillow, the average value of a home in the United States was $356,585 at the end of 2024, up 2.6% from a year earlier. But that’s just an average for the whole country. In many states, homes cost more. Zillow reported that the average value of a home in California came in at $773,263 as of the end of 2024. If you live in Massachusetts, the average home price was $623,582, and New Jersey’s average was $538,363. A $5,000 monthly payment isn’t unusual in such states—especially if you’re buying a home that costs more than those averages. Coupled with stubbornly high mortgage rates, a $5,000 payment is very realistic.

So how much would your household need to earn to comfortably afford a $5,000 mortgage payment each month? 

You Need a Monthly Income of $17,857.15 to Afford a $5,000 Mortgage Payment

The 28/36 rule is a good guideline to use when determining how much monthly income you’ll need to afford a $5,000 mortgage payment. 

This rule states that you should spend no more than 28% of your pre-tax income—also known as gross income—on your monthly mortgage payment, including principal, interest, property taxes and homeowners’ insurance costs. The rule also says that you should spend no more than 36% of your pre-tax income on your total recurring monthly debts, including your mortgage, student, auto and personal loan payments, and your required minimum credit card payments. 

Using the 28% rule, you’d need a household monthly income of at least $17,857.15 to afford a $5,000 mortgage payment. That’s because $17,857.15 multiplied by 0.28 equals $5,000. That means your household would need to earn a yearly income of at least $214,285.80 to afford this mortgage payment.

Remember, though, that your monthly mortgage payment usually doesn’t include just the money you pay for your principal balance and interest. Most lenders require that you create an escrow account and make monthly payments to cover your estimated property tax and homeowners’ insurance bills. And if you don’t come up with a down payment of at least 20% of your home’s sales price, you’ll likely have to pay for private mortgage insurance (PMI) for the first several years of your loan. 

The 28%, then, should also cover those additional mortgage expenses.

How expensive of a home can you buy if you opt to spend $5,000 on your monthly mortgage payment? This depends on a few factors: your mortgage’s interest rate, your down payment, your property taxes, and your homeowners’ insurance costs.

You could purchase a home costing $794,500 if you took out a 30-year fixed-rate mortgage and came up with a down payment of 20% ($158,900). The average interest rate on a 30-year fixed-rate mortgage was 6.98% on Jan. 16. If you landed that interest rate and paid $600 each month for property taxes and $180 per month for homeowners’ insurance, you’d be left with a monthly mortgage payment of $5,000.

You could lower your payment by qualifying for a lower interest rate—a credit score of 740 or higher could help with that. Your monthly mortgage payment for that $794,500 home might be lower, too, if you purchased in a part of the country with lower property taxes or if your homeowners ‘insurance policy came with a lower premium.

Just Because You Can Afford It, Should You?

Just because you can afford a $5,000 mortgage payment doesn’t mean you should buy a home that requires that large of a payment.

Consider your other expenses. If you are spending big on auto and student loans, you might break the 36% part of the 28/36 rule, meaning that your recurring monthly payments equal more than 36% of your pre-tax income. 

Rather than spend so much money on a mortgage, it might make more financial sense to buy a less expensive home and devote more of your income to paying down your car and student loans. 

The same is true if you are burdened with thousands of dollars of credit card debt. Instead of buying the costliest home you can afford, it might make more sense to spend less on a home and use any extra money to pay down your credit card debt, especially considering the high interest rates that come with this type of debt. 

Before buying a home at the top of your budget, take a close look at your finances. You might be able to put that extra money spent on a mortgage payment to better use elsewhere.