To afford a $400,000 house you need a salary of about $126,090 a year ($10,508 a month gross) under the 28/36 rule, with 10% down at an example 6.5% rate over 30 years and no other debts. The full payment is about $2,942 a month: $2,275 principal and interest plus $667 tax, insurance and PMI. With 20% down the salary needed drops to $108,826, but the cash down rises to $80,000.
Salary needed (example)
$126,090
6.5% · 30 years · 10% down · no other debts
Gross monthly income
$10,508
Example assumptions, not current market rates: property tax 1.1% of price a year, insurance $1,800 a year, PMI 0.5% of the loan a year below 20% down, 28% housing and 36% total-debt limits. Not a loan offer or financial advice.
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
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.
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Frequently asked questions
How much do I need to make to afford a $400k house?
About $126,090 a year ($10,508 a month) in gross income, with 10% down at an example 6.5% rate over 30 years, 1.1% property tax, $1,800 insurance, 0.5% PMI and no other debts. The monthly payment is about $2,942, and 28% of $10,508 covers it.
What is the monthly payment on a $400k house?
With 10% down at 6.5% for 30 years: $2,275 principal and interest, $367 property tax, $150 insurance and $150 PMI, about $2,942 in total. Your own taxes, insurance and rate will change it.
Does 20% down lower the salary needed for a $400k house?
Yes. At 20% down the loan is smaller and PMI disappears, so the salary needed falls to about $108,826, but you need $80,000 in cash instead of $40,000.
Is the salary needed the same for a couple?
Yes, lenders add the gross incomes of everyone on the loan and all of their monthly debts, so a couple needs the same combined income as one person with the same debts.