How to know: Can I buy a house with student loan debt?

If you’re feeling stuck between managing your student loans and pursuing homeownership, you’re not alone.

According to a Forbes Advisor survey by Talker Research, 42% of Millennial and Gen Z adults preparing to buy a home say their student loan debt is delaying their ability to save for a down payment.

But does that mean buying a house is out of reach?

Not necessarily. While student loans are a reality, they don’t have to stop you from buying a home.

With a thoughtful approach and a bit of patience, homeownership could be closer than you think—even with student loans.

This guide is here to help you navigate the process. You’ll find practical tips and thoughtful questions to ask yourself as you take steps toward turning your dream of homeownership into a reality.

Explore first-time homebuyer resources >

Am I ready to settle down?

Your goals and lifestyle play a big role in determining whether you’re ready to buy a home. Reflecting on these questions can help you figure out where you stand:

• Do I know where I’d like to live? If you’ve found a community or neighborhood that feels like home, you might be ready to explore homeownership. But if you’re still exploring different areas or trying to figure out what fits your lifestyle, it might make sense to take your time before committing.
• Do I plan to stay in one place for a while? Buying a home can make sense if you see yourself living in the same city or neighborhood for at least a few years. It can give your investment time to grow. But if you’re unsure where life might take you in the near future, renting could be a better fit.
• Do I plan to stay with my employer for a while? If your job feels stable and you’re not planning a career change soon, homeownership might be a natural next step. But if you’re considering a major career change or relocation, renting might offer the flexibility you need right now.

Can I juggle the expenses of homeownership with student loan payments?

Adding a mortgage on top of student loans could mean another monthly payment to manage. And homeownership comes with other expenses, like homeowner’s insurance, property taxes, maintenance costs and more.

Take a realistic look at your budget. Does the idea of those extra costs feel overwhelming?

If so, try this simple exercise to test your financial readiness:

• Let’s say your rent is $1,000 a month, but buying a house would increase your monthly payment to $1,500. Open a Dupaco You-Name-It Savings account and set up an automatic transfer for that extra $500 each month. Stick with it for three months.

Can you comfortably manage it without cutting into other expenses and goals?

This proactive step gives you a clearer picture of how homeownership might impact your budget and helps you prepare for the financial responsibility.

Bonus: You can put this savings toward your down payment (more on that below).

If you’re already sticking to a budget and managing your student loan payments, you might be in a better position than you realize!

Need help budgeting? Request a free Dupaco Money Makeover >

Have I saved for my down payment?

Saving for a down payment is an important step toward buying a home. The more you save, the more options you’ll have when it comes to choosing a home loan—and the less you’ll need to borrow.

A larger down payment can also help you avoid the added expense of PMI (Private Mortgage Insurance). PMI is usually required if your loan is more than 80% of the home’s purchase price. It protects the lender if you can’t repay your loan.

To stay on track, consider naming your savings goal. Dupaco’s Share Savings accounts come with tools designed to make saving for your dreams—like homeownership—easier.

And if you’re wondering how to save even more, a free Dupaco Money Makeover might be able to help you identify areas where you could cut costs to put more toward your down payment.

Calculate how much you can save each month >

What’s my credit score?

Your credit score plays a big role in determining your mortgage eligibility and the interest rate you’ll pay. Each situation is unique. But eligible buyers need a credit score of at least 620 for a Dupaco fixed-rate home loan.

Your student loans—and how you manage them—can affect your credit score. Here’s how:

• If you consistently make your student loan payments on time, your credit score benefits.
• But if you miss payments or have loans in default, your credit score may suffer, which could make it harder to qualify for a mortgage or result in a higher interest rate.

Even if your credit isn’t where you’d like it to be, there are ways you can improve it:

• Pay your bills on time: Set up automatic payments for bills so you never miss a payment.
• Keep credit card balances low: Aim to use less than 30% of your available credit.
• Avoid opening or closing accounts: The longer your credit history, the better. Keep your accounts steady while you prepare for homeownership.

Review my credit with a free Credit History Lesson >

Your credit score is just one piece of the puzzle. Lenders will also review your salary, savings, other debts and more to determine eligibility.

What’s my debt-to-income ratio?

Lenders want to make sure you can afford both a mortgage and your student loan payments.

One way they do this is by looking at how much debt you’re carrying in relation to your income. This balance between your debt and income is called your debt-to-income ratio (DTI).

Here’s how it works: Your DTI is the percentage of your monthly income that goes toward paying off debts. It’s calculated by dividing your total monthly debt payments (like student loans, credit cards, car loans and a potential mortgage) by your gross monthly income (what you earn before taxes).

For example, if you earn $5,000 a month before taxes and have $1,500 in monthly debt payments, your DTI would be 30% ($1,500 ÷ $5,000 = 0.30 or 30%).

Why does this matter? A DTI of 43% or lower shows lenders that you have a healthy balance between income and debts. This means your total monthly debt payments, including your mortgage, should make up less than 43% of what you earn.

If your DTI is higher than that, it could make it harder to get a mortgage—or favorable terms. In that case, you might need to focus lowering your DTI by paying down existing debt or refinancing your student loans to reduce your monthly payments.

Explore student loan refinancing >

How much house can I afford?

Homeownership is a long-term commitment. So, it’s important to know what you can comfortably afford.

You can use our free home affordability calculator to get an idea of how much home you can afford based on your income, down payment and other factors.

Try the free home affordability calculator >

Once you’re ready to move forward, getting pre-approved for a home loan will help you know how much you can borrow and show sellers that you’re a serious buyer.

Start my application >

Can first-time homebuyer programs help me?

As a first-time homebuyer, you might be eligible for programs, grants or loans designed to make the process more affordable.

These options could include everything from low or no down payment options to grants you don’t have to repay.

Through partnerships, Dupaco can connect you with financing through government programs like the United States Department of Agriculture (USDA) financing, Veterans Affairs Home Loans and Federal Housing Administration (FHA) loans.

These can help reduce the financial strain of buying a home while still paying off student loans.

Explore first-time homebuyer programs >

Homebuying is a journey

Buying a home is a journey—one that requires thoughtful planning, patience and a little determination.

By taking the time to evaluate your situation and explore your options, you can set yourself up for long-term success.

Keep your eye on the prize and take it one step at a time. When you hold the keys to your first home, your journey will be all the more rewarding!