Determining how much home you can afford takes more than just plugging numbers into a loan calculator. You'll want to consider taxes, insurance, mortgage insurance, down payment, and more.
We took all this into consideration to estimate how much you need to make to buy a $200k, $300k, or $400k home.
For all calculations, we’ll assume property taxes of 1% of the home price per year and $125 per month in homeowner’s insurance, and mortgage insurance rates from MGIC. See the full methodology at the end of this article.
Related: Income-Based Mortgage Calculator. Estimate How Much You Can Afford
See if You Qualify for a 2024 Conventional Loan
How Much Income Do You Need to Buy a $200,000 House?
With a 5% down payment and an interest rate of 7.158% (the average according to Mortgage Research Center’s rate tracker at the time of writing), you will want to earn at least $4,544 per month – $54,528 per year – to buy a $200,000 house. This is based on an estimated monthly mortgage payment of $1,636.
Income Needed With Other Debt for a $200k House
Our calculations for the income needed to buy a $200k house assume you have around $400 (or less) in other monthly debts. If your recurring payments are higher, you'll need more income to qualify for a mortgage.
Mortgage Payment | $1,636 | $1,636 | $1,636 |
Other Debt Payments | $500 | $750 | $1,000 |
Total Monthly Debt | $2,136 | $2,386 | $2,636 |
Monthly Income Needed to Qualify | $4,747 | $5,302 | $5,858 |
Income Needed at Different Interest Rates for a $200k House
Your interest rate significantly impacts your monthly payment, which in turn affects how much income you'll need to earn to purchase a $200k home. Here is what your payments and required income could look like at various rates.
Interest Rate | Estimated Payment (PITI) | Required Income (36% Front-End DTI) |
5.0% | $1,372 | $3,811 |
5.5% | $1,431 | $3,975 |
6.0% | $1,491 | $4,142 |
6.5% | $1,553 | $4,314 |
7.0% | $1,616 | $4,489 |
7.5% | $1,680 | $4,667 |
8.0% | $1,746 | $4,850 |
8.5% | $1,813 | $5,036 |
9.0% | $1,881 | $5,225 |
See how much you can afford with our Income-Based Calculator
Income Needed With a Larger Down Payment for a $200k House
Are you able to put down more than 5% towards your purchase? The larger your down payment, the less you’ll spend each month on your mortgage and the lower the income you'll need to qualify. Here are some payments and required incomes that you could be looking at for a $200,000 home based on a 10%, 15%, or 20% down payment.
Home Value | $200,000 | $200,000 | $200,000 |
Down Payment | 10% | 15% | 20% |
Amount Financed | $180,000 | $170,000 | $160,000 |
Monthly Payment | $1,550 | $1,468 | $1,373 |
Minimum Monthly Income | $4,306 | $4,078 | $3,814 |
How Much Income Do You Need to Buy a $300,000 House?
With a 5% down payment and an interest rate of 7.158% (the average at the time of writing), you will want to earn at least $6,644 per month – $79,728 per year – to buy a $300,000 house. This is based on an estimated monthly mortgage payment of $2,392.
Check your home buying power using your exact income with this calculator
Income Needed With Other Debt for a $300k House
Our calculations for the income needed to buy a $300k house assume you have around $600 (or less) in other monthly debts. If your recurring payments are higher, you'll need more income to qualify for a mortgage.
Mortgage Payment | $2,392 | $2,392 | $2,392 |
Other Debt Payments | $750 | $1,000 | $1,250 |
Total Monthly Debt | $3,142 | $3,392 | $3,642 |
Monthly Income Needed to Qualify | $6,982 | $7,538 | $8,093 |
See how much you qualify for by speaking with a lender here.
Income Needed at Different Interest Rates for a $300k House
Your interest rate significantly impacts your monthly payment, which in turn affects how much income you'll need to earn to purchase a $300k home.
Interest Rate | Estimated Payment (PITI) | Required Income (36% Front-End DTI) |
5.0% | $1,995 | $5,542 |
5.5% | $2,083 | $5,786 |
6.0% | $2,174 | $6,039 |
6.5% | $2,267 | $6,297 |
7.0% | $2,361 | $6,558 |
7.5% | $2,458 | $6,828 |
8.0% | $2,556 | $7,100 |
8.5% | $2,657 | $7,381 |
9.0% | $2,758 | $7,661 |
Income Needed With a Larger Down Payment for a $300k House
You’ll need less income if you put more down on a home.
Home Value | $300,000 | $300,000 | $300,000 |
Down Payment | 10% | 15% | 20% |
Amount Financed | $270,000 | $255,000 | $240,000 |
Monthly Payment | $2,263 | $2,139 | $1,997 |
Minimum Monthly Income | $6,286 | $5,942 | $5,547 |
How Much Income Do You Need to Buy a $400,000 House?
With a 5% down payment and an interest rate of 7.158% (the average at the time of writing), you will want to earn at least $8,742 per month – $104,904 per year – to buy a $400,000 house. This is based on an estimated monthly mortgage payment of $3,147.
Income Needed With Other Debt for a $400k House
Our calculations above for the income needed to buy a $400k house assume you have around $800 (or less) in other monthly debts. But what if your debts like auto and student loans require larger payments?
Mortgage Payment | $3,147 | $3,147 | $3,147 |
Other Debt Payments | $1,000 | $1,250 | $1,500 |
Total Monthly Debt | $4,147 | $4,397 | $4,647 |
Monthly Income Needed to Qualify | $9,216 | $9,771 | $10,327 |
See how much you can afford based on your income with this calculator.
Income Needed at Different Interest Rates for a $400k House
Your interest rate significantly impacts your monthly payment, which in turn affects how much income you'll need to earn to purchase a $400k home. Following is the estimated income required at various rates. You need to make about $3,000 more per month to afford the same home at an 8% rate versus 5%.
Interest Rate | Estimated Payment (PITI) | Required Income (36% Front-End DTI) |
5.0% | $2,619 | $7,275 |
5.5% | $2,736 | $7,600 |
6.0% | $2,857 | $7,936 |
6.5% | $2,981 | $8,281 |
7.0% | $3,107 | $8,631 |
7.5% | $3,236 | $8,989 |
8.0% | $3,367 | $9,353 |
8.5% | $3,501 | $9,725 |
9.0% | $3,636 | $10,100 |
Get a personalized rate quote from a lender.
Income Needed With a Larger Down Payment for a $400k House
Making a large down payment reduces your monthly payment, especially if you can reach 20% down. This eliminates mortgage insurance, lowering your overall payment considerably.
Home Value | $400,000 | $400,000 | $400,000 |
Down Payment | 10% | 15% | 20% |
Amount Financed | $360,000 | $340,000 | $320,000 |
Monthly Payment | $2,976 | $2,810 | $2,621 |
Minimum Monthly Income | $8,267 | $7,806 | $7,281 |
Methodology
Numerous variables go into determining your monthly cost and the income that you'd need to qualify for a loan. Different types of mortgages have different requirements, and each lender may impose unique qualifications.
To simplify things while still coming up with real-world figures, we've based our calculations (unless otherwise noted) on the following:
A 30-year fixed-rate conventional mortgage
An interest rate of 7.158% - the current 30-year conventional average (at the time of writing) on the Mortgage Research Center homepage
A down payment of 5% of the purchase price
Lenders allowing a 36% front-end (housing) DTI and a 45% back-end (total) DTI
Annual taxes equal to 1% of the purchase price
Mortgage insurance costs from MGIC, based on a credit score of 760
Homeowners insurance with a monthly premium of $125
No required homeowners association dues
Closing costs that are not wrapped into your loan and do not impact your available funds
Remember: With so many loan options out there, the numbers in this article aren’t set in stone. Some mortgage companies may be willing to fund loans with a back-end DTI of 50% or even higher. Others may have programs available to specific borrowers – such as lower-income or first-time homebuyers – that could offer interest rates and resulting payments lower than the average.
See if You Qualify for a 2024 Conventional Loan
What Debt Is Included in DTI?
Not every bill you pay will be included in your debt-to-income (DTI) calculations. You don't need to worry about your Netflix subscription or gym membership impacting your home purchasing power.
Instead, lenders are primarily focused on your housing expenses – including any taxes, insurance, and association dues – and other ongoing installment or court-ordered payments.
Some of the monthly expenses that are likely to be counted in your DTI include:
Mortgage costs (PITIA)
Car loans
Student loans
Personal loans
Credit card minimums
Alimony or child support payments
Do You Qualify for a $200k, $300k, or $400k Home?
By this point, you should have a pretty good idea of how much income you need to buy a home for $200k, $300k, or $400k, although your actual figures could vary. Ultimately, the best way to know if you qualify for a home loan – especially if your income is right on the cusp of our estimates – is to check the current mortgage rates and apply with a well-reviewed lender for a personalized quote.
Get your quote here.
About The Author:
Tim Lucas spent 11 years in the mortgage industry and now leverages that real-world knowledge to give consumers reliable, actionable advice. Tim has been featured in national publications such as Time, U.S. News, MSN, The Mortgage Reports, and more.
