Salary needed by rate and down payment
Each cell is the gross yearly income whose 28% housing limit covers the full payment on a $400,000 home with no other debts.
| Rate | 3.5% down | 5% down | 10% down | 20% down |
|---|---|---|---|---|
| 5.5% | $122,964 | $121,397 | $116,173 | $100,011 |
| 6.5% | $133,598 | $131,865 | $126,090 | $108,826 |
| 7.5% | $144,706 | $142,801 | $136,450 | $118,035 |
Moving from 10% to 20% down lowers the income needed from $126,090 to $108,826 at 6.5%: the loan shrinks by $40,000 and the $150 a month of PMI goes away. A one-point change in rate moves the income needed by roughly $10,139 at 10% down.
How other debts change it (6.5%, 10% down)
| Other monthly debts | Salary needed | Limit that binds |
|---|---|---|
| None | $126,090 | 28% housing |
| $300 | $126,090 | 28% housing |
| $600 | $126,090 | 28% housing |
| $1,000 | $131,404 | 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 $126,090 figure is built
With $40,000 down the loan is $360,000. Principal and interest at 6.5% over 30 years are $2,275 a month, property tax $367, insurance $150 and PMI $150, for $2,942 in total. Dividing by 28% gives $10,508 of gross monthly income, or $126,090 a year. A 15-year loan at the same rate needs about $162,971, because the same price is repaid twice as fast; see 15-year vs 30-year mortgages.
Nearby prices
- Salary needed for a $300k house: about $96,175.
- $400k house: about $126,090.
- Salary needed for a $500k house: about $156,006.
Going the other way: how much house you can afford on $130k 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.