Key Takeaways
A $5,000 mortgage payment isn’t that unusual in states like California, Massachusetts, or New Jersey, where housing prices are higher than the national average.
Not only do housing prices impact how much you pay for your mortgage, but today’s mortgage rates range from 6.78% to 7.06% across the U.S. which can cause you to pay more than you’d like for your new home.
You’d need a monthly income of at least $17,857 to afford a $5,000 monthly mortgage payment.
The 28/36 rule is a key guideline to help determine how much you can spend each month on a mortgage. This rule states that you should spend no more than 28% of your pre-tax income on your 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 pr