Salary needed by rate and down payment
Each cell is the gross yearly income whose 28% housing limit covers the full payment on a $600,000 home with no other debts.
| Rate | 3.5% down | 5% down | 10% down | 20% down |
|---|---|---|---|---|
| 5.5% | $181,232 | $178,881 | $171,045 | $146,802 |
| 6.5% | $197,182 | $194,584 | $185,921 | $160,025 |
| 7.5% | $213,844 | $210,987 | $201,461 | $173,838 |
Moving from 10% to 20% down lowers the income needed from $185,921 to $160,025 at 6.5%: the loan shrinks by $60,000 and the $225 a month of PMI goes away. A one-point change in rate moves the income needed by roughly $15,208 at 10% down.
How other debts change it (6.5%, 10% down)
| Other monthly debts | Salary needed | Limit that binds |
|---|---|---|
| None | $185,921 | 28% housing |
| $300 | $185,921 | 28% housing |
| $600 | $185,921 | 28% housing |
| $1,000 | $185,921 | 28% housing |
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 $185,921 figure is built
With $60,000 down the loan is $540,000. Principal and interest at 6.5% over 30 years are $3,413 a month, property tax $550, insurance $150 and PMI $225, for $4,338 in total. Dividing by 28% gives $15,493 of gross monthly income, or $185,921 a year. A 15-year loan at the same rate needs about $241,242, because the same price is repaid twice as fast; see 15-year vs 30-year mortgages.
Nearby prices
- Salary needed for a $500k house: about $156,006.
- $600k house: about $185,921.
- Salary needed for a $750k house: about $230,795.
Going the other way: how much house you can afford on $200k 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.