What salary do you need for a home?
This calculator turns a home price into the gross household income that would keep your total monthly debts within a chosen share of income. It includes principal and interest, property taxes, insurance, HOA dues and an estimate of PMI when you put less than 20% down.
How it works
First it works out the full monthly housing payment for the price, down payment and rate you enter. It adds any other monthly debts, then divides by 28%, 36% and 43% to show the income each guideline implies. The 36% row is a common middle ground.
An example
A $650,000 home with 20% down at 6.5%, 1.5% property taxes and $1,800 a year for insurance costs roughly $4,250 a month. Keeping that at 36% of gross income takes an income of about $142,000 a year; at 43%, about $119,000.
Common mistakes
- Leaving out other debts. A $600 car payment raises the income needed by $20,000 a year at a 36% ratio.
- Using a lower tax rate than the town you’re buying in. Check the actual rate.
- Treating the stretch number as a target. It leaves little room for anything else.
Why property taxes matter so much
Two homes at the same price can need very different incomes because property tax rates differ widely from town to town. In parts of New Jersey and Long Island, taxes on a $650,000 home can run well over $1,000 a month, while in much of California the rate on a new purchase is closer to 1.1% to 1.3% of the price. Enter your town’s rate for a realistic answer.
Choosing a ratio
The 28% row reflects an older guideline for housing costs alone and is a comfortable target if you carry little other debt. The 36% row is a common all-in guideline. The 43% row is closer to the upper limit many lenders use, and leaves the least room for savings. If your income falls between the rows, a lender may still approve you, but check that the payment fits your real monthly budget, not just the ratio.
Questions buyers ask
What income do I need for a $600,000 house?
With 20% down at about a 6.5% rate and typical taxes and insurance, roughly $130,000 a year at a 36% ratio. Enter your own numbers above for a closer estimate.
Does a bigger down payment lower the income needed?
Yes. It shrinks the loan and can remove PMI, which lowers the monthly payment and the income it takes.
Which income counts?
Lenders use gross income before taxes, usually documented with pay stubs, W-2s or tax returns. Income from both borrowers counts if you apply together.