How much do I need to make to afford a 450k house? (2024)

FAQs

How much do I need to make to afford a 450k house? ›

To afford a $450,000 mortgage you will need to be making approximately $140,000 per year. However, choosing to get a mortgage without making a down payment could result in much higher interest rates than the ones you would have gotten with a down payment.

Following the 28/36 rule, you should be able to afford the monthly principal and interest payments on a home purchase of that size with a salary of about $108,000.

Assuming a 30-year fixed conventional mortgage and a 20 percent down payment of $80,000, with a high 6.88 percent interest rate, borrowers must earn a minimum of $105,864 each year to afford a home priced at $400,000.

A $450K mortgage payment is primarily influenced by your loan term and interest rate. A 30-year loan at 7% interest would result in a monthly cost of $2,993 (not including taxes and insurance). But a 15-year loan at the same interest rate would have monthly payments of $4,044.

An Example of the 28/36 Rule for a $120,000 Annual Income

Let's illustrate the 28/36 rule with an example using a $120,000 annual income, which translates to $10,000 per month. Under the 28/36 rule, your monthly housing expenses should not exceed 28% of your monthly income, which, in this case, would be $2,800.

Putting down the standard 20% can help you avoid paying mortgage insurance and interest and could save you thousands of dollars. So you can expect to pay between $13,500 and $90,000 as a down payment on a $450,000 purchase. Keep in mind, besides the down payment amount, you will also have to factor in closing costs.

If you earn $90,000 per year, your monthly income comes to $7,500. So your monthly housing payments should be no more than 28 percent of that, or $2,100.

Yes, a single person can afford a $400,000 house if they meet the income requirements. Their monthly mortgage payment, combined with their other monthly debt obligations, shouldn't exceed 36% of their gross annual income.

How much income you need to buy a house in a specific price range largely depends on the type of loan you're applying for, where you live and other factors. For example, at current mortgage rates, borrowers with an FHA loan and a 10% down payment would need to earn about $70,000 a year to afford a $400,000 house.

How much is a 15-year mortgage on $450000? ›

With a $450,000 mortgage and an APR of 6%, you'd pay $3,797.36 per month for a 15-year loan and $2,697.98 for a 30-year loan. Keep in mind that these amounts only include principal and interest. In many cases, your monthly payment will also include other expenses, too.

The 28% rule says you should keep your mortgage payment under 28% of your gross income (that's your income before taxes are taken out). For example, if you earn $7,000 per month before taxes, you could multiply $7,000 by . 28 to find that you should keep your mortgage payment under $1,960, according to this rule.

As of writing (May 2024), the average monthly repayments on a £450,000 mortgage are £2,631. This is based on interest rates being around 5%, a typical mortgage term of 25 years, and opting for a capital repayment mortgage. Based on this, you would repay £789,197 by the end of your mortgage term.

To afford a $500,000 house, you need to make a minimum of $91,008 a year — and probably more to make sure you're not house-poor and can afford day-to-day expenses, maintenance and other debt, like student loans or car payments. One good guideline to follow is not to spend more than 28 percent of your income on housing.

One rule of thumb is to aim for a home that costs about two-and-a-half times your gross annual salary. If you have significant credit card debt or other financial obligations like alimony or even an expensive hobby, then you may need to set your sights lower.

According to the 28/36 rule, you should spend no more than 28% of your gross monthly income on housing and no more than 36% on all debts. Housing costs can include: Your monthly mortgage payment. Homeowners Insurance. Private mortgage insurance.

In today's climate, the income required to purchase a $500,000 home varies greatly based on personal finances, down payment amount, and interest rate. However, assuming a market rate of 7% and a 10% down payment, your household income would need to be about $128,000 to afford a $500,000 home.

As a rule of thumb, personal finance experts often recommend adhering to the 28/36 rule, which suggests spending no more than 28% of your gross household income on housing. For someone earning $70,000 a year, or about $5,800 a month, this means a housing expense of up to $1,624.

Using the 28% to 30% rule, your ideal maximum monthly payment shouldn't exceed $1,866 and $2,000. With that being said, if you're getting a 30-year fixed-rate mortgage with a 6% interest rate, you can likely afford a home valued up to $263,000 (including property taxes and insurance, and assuming a 5% down payment).