Salary needed by rate and down payment
Each cell is the gross yearly income whose 28% housing limit covers the full payment on a $750,000 home with no other debts.
| Rate | 3.5% down | 5% down | 10% down | 20% down |
|---|---|---|---|---|
| 5.5% | $224,933 | $221,994 | $212,200 | $181,896 |
| 6.5% | $244,871 | $241,623 | $230,795 | $198,425 |
| 7.5% | $265,698 | $262,126 | $250,219 | $215,691 |
Moving from 10% to 20% down lowers the income needed from $230,795 to $198,425 at 6.5%: the loan shrinks by $75,000 and the $281 a month of PMI goes away. A one-point change in rate moves the income needed by roughly $19,010 at 10% down.
How other debts change it (6.5%, 10% down)
| Other monthly debts | Salary needed | Limit that binds |
|---|---|---|
| None | $230,795 | 28% housing |
| $300 | $230,795 | 28% housing |
| $600 | $230,795 | 28% housing |
| $1,000 | $230,795 | 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 $230,795 figure is built
With $75,000 down the loan is $675,000. Principal and interest at 6.5% over 30 years are $4,266 a month, property tax $688, insurance $150 and PMI $281, for $5,385 in total. Dividing by 28% gives $19,233 of gross monthly income, or $230,795 a year. A 15-year loan at the same rate needs about $299,945, because the same price is repaid twice as fast; see 15-year vs 30-year mortgages.
Nearby prices
- Salary needed for a $600k house: about $185,921.
- $750k house: about $230,795.
Going the other way: how much house you can afford on $250k 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.