Income needed for a $300k mortgage: What to know before you buy

Depending on your location, a $300,000 mortgage can go pretty far, offering many buyers access to properties like condos and single-family homes in growing neighborhoods. 

Understanding the income needed for 300k mortgage approval is the key to making sure the step forward feels sustainable rather than stressful. Knowing what goes into the monthly payment and how lenders look at your finances puts you in control before you even start house hunting.

Below, we’ll explore what a $300,000 home can cost and the factors that affect your monthly payments.

...in as little as 3 minutes – no credit impact

Ideal salary for a $300k house payment

Many people follow the 28 percent rule when calculating what percentage of their income should go toward a mortgage. This rule recommends that mortgage payments don’t exceed 28 percent of your income. 

Your monthly costs will vary depending on your interest rate, down payment, and loan length term. But imagine you’re buying a $300,000 home with 20 percent down. The term is 30 years, and the interest rate is 6.5 percent. 

In that scenario, your monthly payment will total $1,517. If you follow the 28 percent rule, you’d need to make at least $5,418 per month to comfortably afford the mortgage.

It’s also worth planning for expenses that fall outside the mortgage itself. Property taxes, homeowners insurance, and ongoing maintenance all add to your monthly costs.

Main factors that affect home affordability

The following factors can greatly affect how far $300,000 goes during a home purchase:

— Down payment: The more you put down, the less you borrow. A smaller loan leads to lower monthly payments, which can give you more wiggle room in other parts of your budget.

— Interest rates: Mortgage payments go toward both your principal and interest. The higher the interest rate, the more you’ll owe each month. Checking current rate information gives you a sense of where things stand for your $300k mortgage payment.

— Credit score: Your credit score is a quick signal to lenders that you handle debt well. Having a higher score can lead to more favorable loan terms.

— Debt-to-income (DTI) ratio: This shows how much of your paycheck goes to other debts, like car payments and student loans. Lenders are more likely to approve loans for people with a lower DTI, and having fewer debts also means your budget will be under less stress once you add mortgage payments to the mix.

— Closing costs: When purchasing a home, you’ll pay more than just a down payment. There are fees for the appraisal, title work, and processing to account for when budgeting.

— Property taxes and insurance: Lenders often put money toward these fees into escrow accounts, which is part of your monthly bill. Prices vary depending on where you buy.

Breakdown example of a $300k mortgage

To get a sense of what a mortgage for a 300k house looks like, consider the following examples: 

Imagine you have a 3 percent down payment and agree to a 30-year mortgage at 4 percent. Your base mortgage payment would total $1,489 a month, not accounting for property taxes, HOA fees, and homeowners insurance. With a down payment of less than 20 percent, you’ll also need to pay for private mortgage insurance (PMI). This protects the lender in case you default on your loan. 

Now, say you have a 20 percent down payment for a 15-year loan at 6 percent. Your rough monthly payment would total $2,556.

For a quick look at your own expenses, check out Better’s mortgage calculator tool. It lets you plug in different numbers, like down payment percentage or interest rate, and see how the payment changes. The goal isn’t to find the perfect number but to see how different choices shift the total. That way, when you meet with a lender, you already know the range that works for your budget.

Down payment options for a $300k mortgage

Not everyone puts down the same amount when buying a home. These are the most common scenarios and what they mean for a $300,000 mortgage:

— 20%: Putting 20 percent down is ideal for some home buyers. It removes the PMI requirement and lowers the monthly payment. For a $300,000 mortgage, that’s $60,000 up front.

— 10%: With 10 percent down, the up-front cost is smaller, but the monthly payment is higher. Additionally, you’ll pay for PMI until you reach certain thresholds.

— 3–5%: Some loans allow you to put 3 to 5 percent down. The initial savings are lower, but you’ll see higher monthly costs.

— No down payment: Certain government-backed programs allow you to buy a home without a down payment. They can make buying possible sooner, but eligibility rules apply.

Tips on how to qualify for a $300k mortgage

If you’re wondering whether you can afford a $300k house, take the following steps to prepare.

Review your budget

Knowing what you can realistically spend each month is crucial — owning a home isn’t worth it if you can’t afford other necessities. To help you understand how this expense fits into your current lifestyle, check out Better’s guide on budgeting for mortgage payments.

Increase your credit score

Improving your credit score strengthens your loan application, so work on improving it. Below are a few ways to do so:

— Pay your bills on time.

— Keep your credit utilization low, ideally less than 30%.

— Avoid opening new lines of credit.

— Try not to close old credit card accounts, particularly if they’re impacting the length of your credit history.

Pay off current debts

Many lenders prefer a DTI ratio of 36 percent or lower. To reduce this number, pay off outstanding debts like car loans and credit card balances. It’s important to note that paying off loans may temporarily lower your credit score, but it’s often worth it to lower your DTI ratio.

How do you obtain a $300k mortgage?

Qualifying for a mortgage typically involves the following steps:

— Find a mortgage lender: Many people start by comparing lenders to see who has terms that fit their needs. Better, for instance, offers competitive rates and a digital application process, which can make the process easier to manage from the start.

— Gather documentation: Lenders need paperwork like proof of income, tax returns, and a record of debts and assets. Preparing these early prevents back-and-forth later.

— Look for homes: Once you know your budget, work with an agent to explore homes that fit within your approval amount. 

— Submit your application and close: After choosing a property, your lender finalizes the details, arranges an appraisal, and prepares the loan for closing. You’ll likely check in a few times during this step to confirm documents and final numbers before signing.

Find a home you love with Better

Determining whether a $300,000 mortgage fits within your budget is a good first step toward homeownership. Factors like current interest rates, DTI ratios, and down payments can all affect your ability to buy. 

Once you’re ready to move forward, check out Better’s AI-powered mortgage system. We offer a fully digital process with clear fees and competitive pricing, which can take some of the stress out of applying. Approvals can happen in as little as three minutes, so you can start the homebuying journey faster.

Learn how Better can help you find a home that works for your budget and lifestyle.

...in as little as 3 minutes – no credit impact

FAQ

What other costs should I consider for a $300K mortgage loan?

Beyond the monthly payment, expect to budget for the following additional costs: 

— Closing costs

— Property taxes

— Homeowners insurance

— HOA fees

— Maintenance

— PMI

Is a $70k salary enough for a $300k mortgage loan?

The salary needed for $300k mortgage approval depends on your debt levels, credit, and down payment. For some households, a $70,000 salary may be sufficient, while others may need more income to qualify comfortably.

What credit score do I need for a $300k loan?

Many lenders prefer a higher credit score because it shows financial reliability. Conventional loans often require a score of 620 or higher, though minimum requirements vary. Either way, improving your score before applying often results in better terms.