If you’re earning $75,000 each year, you’re doing a bit better than half the country. According to data from the U.S. Census Bureau, the median household income in 2021 stood at $70,784, so that extra $4,216 puts you in the upper 50 percent of earners. However, frustratingly high inflation is causing everything to cost more, including real estate, so your money won’t go as far as it once did. As you try to determine how much house you can afford on your $75,000 salary, read on for a rundown of key considerations to keep in mind.

## Start with the 28/36 rule

So how much of your salary should you be spending on housing costs? Historically, the 28/36 rule has been a guideline that many lenders use to help understand a borrower’s ability to repay a mortgage and other debts. The rule advises spending no more than 28 percent of your income on housing expenses, and no more than 36 percent of your income on total debt payments, including housing.

If you’re making $75,000 each year, your monthly earnings come out to $6,250. To meet the 28 piece of the 28/36 rule, that means your monthly mortgage payment should not exceed $1,750. And for the 36 part, your total monthly debts should not come to more than $2,250.

Of course, buying a home is more complicated than just following a simple rule. Bankrate’s new-home calculator can help you crunch all the numbers to get a deeper, more detailed understanding of how much house you can comfortably afford.

## What factors determine how much you can afford?

Obviously your salary is the number one factor in what you can spend on a home. But the amount you can afford is dependent on the rest of your debt as well, including things like car payments and student loans. Here are some other important factors that can have an impact:

### Credit score

Your credit score is a reflection of your risks as a borrower. Any lender will look at this number to understand your track record of paying back other debts, which helps them assess your potential for defaulting on the loan. Conventional loans typically require a minimum credit score of 620, but a significantly higher score can help you qualify for significantly lower rates.

“Improving your credit score can make a big difference to monthly payments,” says Libby Cooper, vice president of operations for Zillow Mortgages. “For example, a borrower with an ‘excellent’ credit score — between 740 and 850 — can potentially qualify for a 30-year fixed-rate mortgage with an interest rate upward of 1.5 percentage points better than someone with a ‘fair’ credit score — between 620 and 639. This equates to about a $300 difference in monthly mortgage payments [principal and interest only] and over $100,000 in interest over the life of a 30-year fixed loan, based on the current price of a typical U.S. home [approximately $355,000].”

### Down payment

How much of that $75,000 annual salary have you managed to keep in your savings account? Making a bigger down payment lowers the amount of money you need to borrow, thereby shrinking your monthly mortgage payments. For example, consider this breakdown from Bankrate’s mortgage calculator to see how different down payment amounts on a $320,000 home, assuming a 7 percent interest rate, would impact monthly mortgage payments:

Down payment | Monthly mortgage payment |
---|---|

$64,000 (20 percent) | $1,703 |

$32,000 (10 percent) | $1,916 |

$9,600 (3 percent) | $2,065 |

With your $75K salary, the 28 percent rule means not spending more than $1,750 per month on housing. So if you don’t want to overextend yourself, you would need to put down 20 percent — or find a cheaper home. (Note that this example does not include other common costs of homeownership, like property taxes and homeowners insurance.)

### Loan-to-value ratio

Your loan-to-value ratio (LTV) plays an important role in determining your buying power as well. Lenders like to see a 20 percent down payment for an 80/20 LTV. Smaller down payments will trigger an automatic mortgage insurance premium, meaning you’ll need to budget for another expense: private mortgage insurance.

### Debt-to-income ratio

In addition to mortgage debt, you likely have other debt as well, like student loans, car payments and credit cards. Lenders will evaluate your overall debt-to-income (DTI) ratio (that’s ultimately what the 36 in the 28/36 rule refers to) to make sure you aren’t stretching your finances too thin as you attempt to pay off all your loans.

“While most mortgage products will allow up to 40 to 50 percent DTI, it is more favorable to be in the 20 percent range,” says Eileen Derks, senior vice president and head of mortgage at Laurel Road. “This will minimize risk of repayment should unexpected expenses arise or a significant interest rate increase occur on variable-rate credit products. It is best to live within our means and anticipate [that] unexpected expenses will almost always occur over the life of a mortgage loan.”

## Know your mortgage options

Fixed-rate, adjustable-rate, conventional, FHA, VA — there are loads of different financing options for buying a home. The best way to figure out how much you can borrow is to get preapproved for a mortgage. A mortgage expert can listen to your needs, review your financial information (pay stubs, tax returns, credit report, etc.) and give you a firm estimate of your buying power. The amount you’re preapproved for indicates the amount the lender is likely to eventually approve you for officially.

Once you find a home and are ready to finalize your mortgage loan, shop around. (You can go with the same lender that preapproved you, but you’re not obligated to.) The interest rate is the biggest headline you’ll notice when looking at different loans, but there are a number of other puzzle pieces that need to fit into place as well. What fees does each lender charge? Will you need to buy mortgage points to qualify for a lower rate? Do certain lenders offer benefits that others don’t?

### First-time homebuyer programs and other assistance

If this maze of mathematics has you feeling overwhelmed, don’t worry. There are a number of assistance options specifically designed for first-time homebuyers, both on the federal and local level. There are many down payment assistance programs out there as well. Plus, depending on where you live and the size of your family, your $75,000 annual earnings may actually help you qualify as a low- or moderate-income borrower — a distinction that can put you in the running for low-cost loans and grants for down payment and closing costs.

In addition, depending on what you do for a living, you might be able to qualify for even better borrowing terms. For example, teachers, law enforcement officers, EMTs and firefighters are all eligible for the Department of Housing and Urban Development’s Good Neighbor Next Door program. If you fall into one of those categories, you might be able to buy a home for a very significant discount.

## Stay the course until you actually close

You’ve figured out how much you can afford on your $75,000 salary, gone into contract on a new home and secured a mortgage — but your work isn’t quite done yet. Once a lender has approved you based on all your personal financial information, that information needs to stay the same until the day you close. Now is not the time to do anything that might change your circumstances, like buying a new car or opening a new credit card.

“Prospective home buyers should avoid making major financial changes before closing on their home,” Cooper says. “This includes changing or quitting jobs, closing an account to try and remove it from your record or making a major purchase that needs financing, such as a car or new furniture set.”

## FAQs

### How much house can you afford on 75k a year? ›

If you're making $75,000 each year, your monthly earnings come out to $6,250. To meet the 28 piece of the 28/36 rule, that means your monthly mortgage payment should not exceed $1,750.

**How much house can I afford on $70,000 a year? ›**

The house you can afford on a $70,000 income will likely be **between $290,000 to $360,000**. However, your home-buying budget depends on quite a few financial factors — not just your salary.

**Is 75k a good salary? ›**

Given this, a good salary would be $75,000. It is higher than the national average and hovers around the average salary for the four most expensive states in the nation. In other words, a $75,000 salary would cover the basic necessities in even the priciest of areas.

**How much do you have to make a year to afford a $500000 house? ›**

How much do I need to make for a $500,000 house? A $500,000 home, with a 5% interest rate for 30 years and $25,000 (5%) down will require an annual income of **$124,192**.

**What house can I buy with 80000 salary? ›**

So, if you make $80,000 a year, you should be looking at homes priced between **$240,000 to $320,000**. You can further limit this range by figuring out a comfortable monthly mortgage payment. To do this, take your monthly after-tax income, subtract all current debt payments and then multiply that number by 25%.

**How much income do you need for 400k mortgage? ›**

What income is required for a 400k mortgage? To afford a $400,000 house, borrowers need $55,600 in cash to put 10 percent down. With a 30-year mortgage, your **monthly income should be at least $8200** and your monthly payments on existing debt should not exceed $981. (This is an estimated example.)

**How much is a 300k mortgage per month? ›**

On a $300,000 mortgage with a 3% APR, you'd pay **$2,071.74 per month on a 15-year loan** and $1,264.81 on a 30-year loan, not including escrow. Escrow costs vary depending on your home's location, insurer, and other details.

**Can I afford a 400k house? ›**

The annual salary needed to afford a $400,000 home is about $165,000. Over the past two years, home prices have skyrocketed amid the combined impacts of a global pandemic and housing inventory shortages. Between 2020 and 2022, home prices soared 30%, according to Freddie Mac.

**How much will I get back in taxes if I made 75000? ›**

Tax refunds by income: Average tax returns tend to rise with income. **The average tax refund in 2020 for someone making between $50,000 and $75,000 was $1,992**. The average tax return for someone making $200,000 or more was $4,334.

**What percentage of Americans make over 75k? ›**

In the U.S., the Middle Class constitutes any income between $42,000 and $126,000. Overall, the highest percentage of Americans (16.5%) have an income between $50,000-$74,999. With the second and third highest percentages being those who make between $75,000-$99,999 (12.2%) and $100,000-$149,000 (15.3%).

### What is $75000 salary to hourly? ›

$75,000 yearly is how much per hour? If you make $75,000 per year, your hourly salary would be **$36.06**. This result is obtained by multiplying your base salary by the amount of hours, week, and months you work in a year, assuming you work 40 hours a week.

**Is 75k a year middle class? ›**

With the median U.S. income being about $80,000 a year, **a household of four earning between roughly $52,000 and $175,000 a year is considered middle class**.

**What is house 3x salary? ›**

The 3x rent rule is a general guideline that many landlords follow, which says that the ideal income level of a potential tenant is **3 times the amount of rent**. So if the rent is $2,000 per month, you should earn at least $6,000 each month to qualify for the apartment.

**How much to afford a 600k house? ›**

In your case, your monthly income should be about $18,502. The monthly payment on a 600k mortgage is $4,440. You may want to be a little more conservative or a little more aggressive. You'll be able to change this in our how much house can I afford calculator.

**How much income do you need to qualify for a $200 000 mortgage? ›**

To be approved for a $200,000 mortgage with a minimum down payment of 3.5 percent, you will need an approximate income of $62,000 annually.

**How much can I borrow on 80k salary? ›**

On an annual income of $80,000 after-tax, a lender may offer you a mortgage of **$1.75 million**. This assumes that the applicant's credit score is at least average. It also assumes that there are no outstanding debts owed. The applicant's expenses are also zero.

**What mortgage can I afford if I make $90000 a year? ›**

You can afford a **$270,000 house**.

**How much income do you need to buy a $650000 house? ›**

How Much Income Do I Need for a 650k Mortgage? You need to make **$240,520 a year** to afford a 650k mortgage. We base the income you need on a 650k mortgage on a payment that is 24% of your monthly income. In your case, your monthly income should be about $20,043.

**How much is a 500k house monthly payment? ›**

The average mortgage rate for a $500,000, 30-year fixed-rate loan is around 5.4% for those with good credit. So, your monthly payment would be **around $2250** without taxes and fees.

**How much annual income to afford a 300K house? ›**

How much do I need to make to buy a $300K house? To purchase a $300K house, you may need to make **between $50,000 and $74,500 a year**. This is a rule of thumb, and the specific salary will vary depending on your credit score, debt-to-income ratio, the type of home loan, loan term, and mortgage rate.

### How much is a monthly payment on a 400k house? ›

Monthly payments for a $400,000 mortgage

On a $400,000 mortgage with an annual percentage rate (APR) of 3%, your monthly payment would be **$1,686 for a 30-year loan and $2,762 for a 15-year one**.

**How much is a $1 million dollar mortgage monthly payment? ›**

A 30-year, $1,000,000 mortgage with a 4% interest rate costs about **$4,774 per month** — and you could end up paying over $700,000 in interest over the life of the loan.

**How much is a monthly payment on a 200k house? ›**

On a $200,000, 30-year mortgage with a 4% fixed interest rate, your monthly payment would come out to **$954.83** — not including taxes or insurance.

**What credit score is good for buying a house? ›**

It's recommended you have a credit score of **620 or higher** when you apply for a conventional loan. If your score is below 620, lenders either won't be able to approve your loan or may be required to offer you a higher interest rate, which can result in higher monthly payments.

**How much is a 600k mortgage monthly payment? ›**

Monthly Payment For a $600,000 Mortgage

With a 5% down payment ($30,000) and an interest rate of 6%, you would pay **$3417 monthly** for a 30-year fixed-rate loan, not including taxes and insurance. For a 15-year fixed-rate loan, it would be $4809.

**What is the mortgage payment on a $2 million dollar home? ›**

What Is the Monthly Mortgage Payment for a $2 Million Home? The national average for a 30-year fixed-rate jumbo loan mortgage is around 3.5%. At that rate, the monthly mortgage payment for a $2 million home will be around **$7,800 per month**, with a 20% down payment.

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

To finance a 450k mortgage, you'll need to earn roughly **$135,000 – $140,000 each year**. We calculated the amount of money you'll need for a 450k mortgage based on a payment of 24% of your monthly income. Your monthly income should be around $11,500 in your instance. A 450k mortgage has a monthly payment of $2,769.

**What is the largest tax refund ever? ›**

What is the largest tax return in history? In what could be the most amazing tax move ever, a Georgia woman filed a **$94 MILLION** tax refund! You have to make over $1.6 billion dollars in income to pay $94 million taxes with Georgia's 6% state income tax rate.

**How much is 75000 biweekly? ›**

Paycheck calculator

A yearly salary of $75,000 is **$2,885 every 2 weeks**. This number is based on 40 hours of work per week and assuming it's a full-time job (8 hours per day) with vacation time paid.

**What salary is considered upper class? ›**

In 2021, the median household income is roughly $68,000. An upper class income is usually considered at least 50% higher than the median household income. Therefore, an upper class income in America is **$100,000 and higher**.

### What salary is top 1%? ›

$570,003 is the cutoff for a top 1% household income in the United States in 2022. For a single earner, the cutoff is $401,622.

**What income is rich? ›**

Based on that figure, an annual income of **$500,000 or more** would make you rich. The Economic Policy Institute uses a different baseline to determine who constitutes the top 1% and the top 5%. For 2021, you're in the top 1% if you earn $819,324 or more each year. The top 5% of income earners make $335,891 per year.

**What is $80000 salary to hourly? ›**

$80,000 is **$38.46 an hour** without vacation time.

If you work a full 40-hour week for 52 weeks, that amounts to 2,080 hours of work.

**How much is $75,000 salary to hourly 40 hours a week? ›**

$37.50 is the hourly wage a person who earns a $75,000 salary will make if they work 2,000 hours in a year for an average of 40 hours per week, with two weeks of total holidays. We take the annual salary of $75,000 and divide it by 2,000 to get to a **$37.50 hourly rate**.

**What does $35 per hour annually? ›**

$35 hourly is how much per year? If you make $35 per hour, your Yearly salary would be **$72,800**. This result is obtained by multiplying your base salary by the amount of hours, week, and months you work in a year, assuming you work 40 hours a week.

**How many Americans make over 400k? ›**

According to the IRS, a $400,000 or more annual household income represents America's top 1.8% income-earners. Per IRS Publication 6292, there were 154 million tax returns filed in 2019, thus approximately **2.8 million** people earn over $400,000.

**What are the 5 income classes? ›**

One objective way some researchers divide individuals into economic classes is by looking at their incomes. From that data, they split earners into different classes: **poor, lower-middle class, middle class, upper-middle class and wealthy**.

**What is the top 2 percent income? ›**

How much wealth do you need to be in the top 2%? People with the top 1% of net worth (opens in new tab) in the U.S. in 2022 had $10,815,000 in net worth. The top 2% had a **net worth of $2,472,000**. The top 5% had $1,030,000.

**What is home 4x income? ›**

The 4x Rule:

**If you do not have a large amount of debt to pay down and you spend less than 20% of your monthly income on bills, you may qualify for a home loan that equals up to 4-times your annual income**.

**Is mortgage a 4x salary? ›**

**Most lenders will lend 4.5 times an annual salary** whether you're employed, a freelancer, contractor or limited company director.

### Is it 3 or 4 times your salary for a mortgage? ›

How many times my salary can I borrow for a mortgage? Lenders will typically use an income multiple of **4-4.5 times salary per person**.

**How much do I need to make to buy a 800k house? ›**

For homes in the $800,000 range, which is in the medium-high range for most housing markets, DollarTimes's calculator recommends buyers bring in $119,371 before tax, assuming a 30-year loan with a 3.25% interest rate. The monthly mortgage payment is estimated at $2,785.

**How much house can I afford for $1,800 a month? ›**

With a $1,800 payment and $0 down you can afford a **maximum house price of $300,826** with these loan terms.

**How to afford a million dollar home? ›**

To afford a $1 million home you need **a minimum annual income of $200,000 to $225,000**. You'll also need to have enough money saved for the down payment and closing costs, which can add up to over 20% of the purchase price. There are a variety of reasons someone might want a million-dollar home in the first place.

**How much income do you need to qualify for a $250000 mortgage? ›**

How much do you need to make to be able to afford a house that costs $250,000? To afford a house that costs $250,000 with a down payment of $50,000, you'd need to earn $37,303 per year before tax. The monthly mortgage payment would be $870. Salary needed for 250,000 dollar mortgage.

**Should I buy a house now or wait for recession? ›**

Lower Home Prices – There are fewer homebuyers during a recession. This low demand from the buy-side will cause home prices to fall. Therefore, **you can typically get a better price on a home when buying during a recession**. Less Competition – Fewer homebuyers means less competition and a more relaxed homebuying process.

**How much house should I buy if I make 100K a year? ›**

Start with the 28/36 rule

If you're earning $100,000 per year, your average monthly (gross) income is $8,333. So, your mortgage payment should be **$2,333 or less**.

**How much is 75k a year hourly? ›**

$75,000 is **$37.50 an hour**.

$37.50 is the hourly wage a person who earns a $75,000 salary will make if they work 2,000 hours in a year for an average of 40 hours per week, with two weeks of total holidays. We take the annual salary of $75,000 and divide it by 2,000 to get to a $37.50 hourly rate.

**How much of a house can I buy if I make 100K a year? ›**

A 100K salary means you can afford a **$350,000 to $500,000** house, assuming you stick with the 28% rule that most experts recommend. This would mean you would spend around $2,300 per month on your house and have a down payment of 5% to 20%.

**How much do you have to make to afford a 300 000 house? ›**

How much do I need to make to buy a $300K house? To purchase a $300K house, you may need to make **between $50,000 and $74,500 a year**. This is a rule of thumb, and the specific salary will vary depending on your credit score, debt-to-income ratio, the type of home loan, loan term, and mortgage rate.

### What is the 28 36 rule? ›

Definition. The 28/36 rule states that **your total housing costs should not exceed 28% of your gross monthly income and your total debt payments should not exceed 36%**. Following this rule aims to keep borrowers from overextending themselves for housing and other costs.

**Can you buy a million dollar house making 100k? ›**

Experts suggest **you might need an annual income between $100,000 to $225,000, depending on your financial profile, in order to afford a $1 million home**. Your debt-to-income ratio (DTI), credit score, down payment and interest rate all factor into what you can afford.

**How much house can you afford on 175k? ›**

For example, if you're bringing in $175,000 a year, have relatively low monthly debt payments of $1,000 a month and have saved up $100,000 for a down payment, you can afford to spend $754,916.73 on a home.

**How much is 75k salary monthly? ›**

A yearly salary of $75,000 is $6,250 a month. This number is based on 40 hours of work per week and assuming it's a full-time job (8 hours per day) with vacation time paid. If you get paid biweekly your gross paycheck will be $2,885.

**How much is $75,000 a year biweekly? ›**

To calculate your biweekly paycheck, you can either multiply your weekly salary by two or divide your annual salary by 26 (the number of pay periods in a year). For a $75,000 annual salary, your biweekly paycheck would be $75,000 / 26 = **$2,884.62**.