Salary needed by rate and down payment
Each cell is the gross yearly income whose 28% housing limit covers the full payment on a $300,000 home with no other debts.
| Rate | 3.5% down | 5% down | 10% down | 20% down |
|---|---|---|---|---|
| 5.5% | $93,830 | $92,655 | $88,737 | $76,615 |
| 6.5% | $101,806 | $100,506 | $96,175 | $83,227 |
| 7.5% | $110,136 | $108,708 | $103,945 | $90,133 |
Moving from 10% to 20% down lowers the income needed from $96,175 to $83,227 at 6.5%: the loan shrinks by $30,000 and the $113 a month of PMI goes away. A one-point change in rate moves the income needed by roughly $7,604 at 10% down.
How other debts change it (6.5%, 10% down)
| Other monthly debts | Salary needed | Limit that binds |
|---|---|---|
| None | $96,175 | 28% housing |
| $300 | $96,175 | 28% housing |
| $600 | $96,175 | 28% housing |
| $1,000 | $108,136 | 36% total debt |
Small debts change nothing at first, because the 28% housing limit is the tighter one. Once other payments pass about 8% of income, the 36% limit takes over and every extra dollar of monthly debt needs about $2.78 more of monthly income.
How the $96,175 figure is built
With $30,000 down the loan is $270,000. Principal and interest at 6.5% over 30 years are $1,707 a month, property tax $275, insurance $150 and PMI $113, for $2,244 in total. Dividing by 28% gives $8,015 of gross monthly income, or $96,175 a year. A 15-year loan at the same rate needs about $123,835, because the same price is repaid twice as fast; see 15-year vs 30-year mortgages.
Nearby prices
- $300k house: about $96,175.
- Salary needed for a $400k house: about $126,090.
Going the other way: how much house you can afford on $100k a year.
Before you rely on this number
Lenders apply their own program limits, and a payment you qualify for is not always one you are comfortable with: the ratios use gross pay and ignore childcare, retirement saving and repairs. Check a specific listing with the mortgage calculator, try your own figures in the salary needed calculator, and read the 28/36 rule guide.