How much house can I afford on $120,000 a year?
- Principal & interest
- $2,250
- Property tax & insurance (est.)
- $538
- Loan amount
- $356,000
- Total interest over 30 years
- $454,058
Affordable home price by interest rate
| Rate (30-yr fixed) | Home price | Loan amount | Principal & interest |
|---|---|---|---|
| 5.00% | $509,000 | $407,000 | $2,185 |
| 5.50% | $487,000 | $390,000 | $2,212 |
| 6.00% | $466,000 | $373,000 | $2,237 |
| 6.50% | $447,000 | $358,000 | $2,260 |
| 7.00% | $429,000 | $343,000 | $2,282 |
| 7.50% | $412,000 | $329,000 | $2,303 |
| 8.00% | $396,000 | $316,000 | $2,322 |
Affordable home price with other monthly debts
| Other debts / month | Home price at 6.5% |
|---|---|
| $0 | $447,000 |
| $300 | $447,000 |
| $500 | $447,000 |
| $800 | $447,000 |
| $1,200 | $383,000 |
Frequently asked questions
How much house can I afford making $120,000 a year?
About $447,000, assuming 20% down ($89,000), a 30-year fixed rate of 6.5% and no other debts. That keeps your total housing payment near $2,800 per month, 28% of your $10,000 gross monthly income.
What mortgage payment can I afford on $120k?
Lenders typically cap housing costs (principal, interest, taxes and insurance) at 28% of gross income — $2,800 per month — and all debts combined at 36%, or $3,600 per month.
How do car loans or student debt change this?
Every dollar of monthly debt above $800 reduces your housing budget dollar-for-dollar under the 36% rule. With $800/month of other debt you could afford about $447,000.
Related
Assumes 20% down (no PMI), 1.1% property tax and 0.35% insurance per year, and the 28/36 debt-to-income guideline. Lenders also weigh credit score, reserves and loan type. Educational estimate, not financial advice. Methodology.