Required Income for a Mortgage Calculator (2024)

This mortgage calculator makes it easy to see how changes in the mortgage rate or the loan amount affect the income required for a loan.

HOW TO USE:To use our mortgage calculator, slide the adjusters to fit your financial situation. The calculator works immediately as you slide or input your gross monthly income, monthly debts, loan terms, interest rate, and down payment.

Scroll down the page for more detailed guidance on using this mortgage calculator and frequently asked questions.

For your convenience, current mortgage rates are published underneath the calculator to help you make accurate calculations reflecting current market conditions.

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By default, 30-year fixed-rate loans are displayed in the table below. Adjust the filters to change the loan amount, duration, loan type, or more.



Calculating Your Mortgage Payment

This mortgage calculator can answer some of the most challenging questions in the home search journey, short of talking to a lender, including what kind of payment can I afford? How much do I need to make to afford a $500,000 home? And how much can I qualify for with my current income?

We’re able to do this by not only considering the loan amount and interest rate but the additional factors that affect yourability to qualify for a mortgage. We include your other debts and liabilities that have to be paid each month and costs like taxes and homeowner’s insurance that are part of the monthly mortgage payment. Doing so makes it easy to see how changes in costs and mortgage rates impact the home you can afford.

While determining mortgage size with a calculator is an essential step, it won’t be as accurate as talking to a lender.

Mortgage Required Income Calculator FAQs

Below are some of the common questions we receive around affordability and the required income calculator.

Calculating the Income Required for a Mortgage

You’ve got a home or a price range in mind. You think you can afford it, but will a mortgage lender agree? Our calculator helps take some of the guesswork out of determining a reasonable monthly mortgage payment for your financial situation.

Mortgage lenders tend to have a more conservative notion of what’s affordable than borrowers do. They have to because lends must ensure the mortgage gets repaid.

Lenders don’t only take into account the mortgage payments but must also look at the other debts you’ve got that take a bite out of your paychecks each month.

Determining this comes down to the debt-to-income (DTI) ratio. DTI is the percentage of your total debt payments as a share of your pre-tax income. A common benchmark for DTI is not spending more than 36% of your monthly pre-tax income on debt payments or other obligations, including the mortgage you are seeking.

Some lenders and loan types may allow DTI to exceed 41%. In these cases, the borrower typically receives additional financial scrutiny.

When calculating yourdebt-to-income ratio, lenders also consider what makes up the entire mortgage payment, including property taxes, homeowner’s insurance, mortgage insurance (if applicable) and condominium or homeowner’s association fees.

What else is included in DTI?

Your debt-to-income ratio also considers auto loans, minimum credit card payments, installment loans, student loans, alimony, child support, and any other expenses you must make each month. It doesn’t typically include recurring monthly charges for utilities, internet service, cable or satellite TV, mobile phone subscription or other charges for ongoing services or other things where the cost is newly incurred each month.

To calculate if you have the required income for a mortgage, the lender takes your projected monthly mortgage payment, adds your expenses for credit cards and any other loans, plus legal obligations like child support or alimony, and compares it to your monthly income. If your debt payments are less than 36 percent of your pre-tax income, you’re typically in good shape.

What if your income varies from month to month? In that case, your lender will likely use your average monthly income over the past two years. But if you earned significantly more in one year than the other, the lender may opt for the year’s average with lower earnings.

Note:Your required income doesn’t just depend on the size of the loan and the debts you have but will vary depending on your mortgage rate and the length of your loan. Those affect your monthly mortgage payment, so the mortgage income calculator allows you to take those into account as well.

Using the Mortgage Income Calculator

Loan information

Begin by entering the desired loan amount, expected mortgage rate, and loan length in the spaces provided. You’ll notice that the required income and a calculation of the monthly mortgage payment immediately appear in the blue box at the top of the calculator.

Note that you can adjust the loan amount and interest rate by using the sliding indicators; left-click and hold on the green triangles to adjust the figures. As you do, the required income level andmonthly mortgage paymentwill immediately change as well.

The calculator also lets you enter information for monthly liabilities and housing expenses. These sections may be displayed or hidden by using the plus ( ) or minus (-) symbols on the right side of the column.

Note:Don’t enter your information for tax payments, homeowner’s insurance or other fees billed on your mortgage statement here, though – those are entered under “housing expenses” further down.

Monthly liabilities

Monthly liabilities is where you enter figures for the minimum monthly payments you must make for auto loans, credit cards, student loans, child support and other obligations. Enter the minimum required and not any higher amount you might voluntarily make.

Enter the same information for your co-borrower if there is one and the two of you have separate liabilities.

Note:Monthly liabilities is for debts and other payments you are legally required to make; don’t enter utility payments, cable or satellite TV, Internet service or other recurring expenses.

Just as with the loan amount and interest rate, you can adjust these figures using the sliding triangles and the required income and monthly loan payments in the blue box will change immediately.

Housing expenses

Here is where you enter the additional costs that are typically billed as part of your monthly mortgage payment: property taxes, homeowner’s insurance, homeowner’s association fees or dues, and private mortgage insurance (PMI) or FHA mortgage insurance, if applicable. Use the worksheet indicated to enter estimates for those figures.

Note:You will only need to pay for mortgage insurance if you make a down payment of less than 20% of the home’s value.

Mortgage insurancetypically costs 0.5 – 1.85 percent of your loan amount per year, billed monthly, though it can go higher or lower depending on your credit score, down payment and length of your loan.

Required annual income for a variety of interest rates

This feature shows how the income required for a home loan of a certain amount varies across a range of interest rates. The lowest rate in the table is the one you selected in the calculator.

Viewing your report

The “View Report” feature will take you to a page summarizing the information you have entered and a table showing the income required for your loan for a range of mortgage rates.

What percentage of income do I need for a mortgage?

A conservative approach is the 28% rule, which suggests you shouldn’t spend more than 28% of your gross monthly income on your monthly mortgage payment.

Be aware that lenders look at far more than the percentage of monthly income put towards a mortgage. Outside of credit score, lenders typically look at your debt-to-income ratio, which compares your monthly debts, including the prospective mortgage payment, to your expenses. With lenders looking at income and expenses, our mortgage calculator provides a great option when determining what you can potentially afford.

How do I qualify for a home loan?

Lenders examine your debt-to-income ratio, credit score, and ability to repay the mortgage to see if you qualify for a home loan. The best way to determine if you qualify is toconnect with a mortgage lender and get pre-approved.

Are income-based mortgage calculators accurate?

Yes, our required income calculator uses a high and low for your debt-to-income ratio to give you an idea of what you may afford and expect in a monthly mortgage payment.

Determining affordability is essential in the homebuying process. You can gauge how much of a mortgage loan you may qualify for based on your income with our Mortgage Required Income Calculator. You will need to work backward by altering the mortgage cost and supplying details of your other financial commitments. The calculator will then reply with an income value with which you compare your current income.

How much do I need to make for a $900,000 house?

A $900,000 home, with a 5% interest rate for 30 years and $45,000 (5%) down requires an annual income of $218,403.

This estimate is for an individual without other expenses, and your situation may differ. Use our calculator above to personalize the estimate of the income you’d need for a $900,000 home.

How much do I need to make for a $750,000 house?

A $750,000 house, with a 5% interest rate for 30 years and $35,000 (5%) down will require an annual income of $183,694.

We’re not including additional liabilities in estimating the income you need for a $750,000 home. Use our required income calculator above to personalize your unique financial situation.

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.

We’re not including any expenses in estimating the income you need for a $500,000 home. Use our required income calculator above to personalize your unique financial situation.

How much do I need to make for a $400,000 house?

A $400,000 home, with a 5% interest rate for 30 years and $20,000 (5%) down will require an annual income of $100,639.

We’re not including any expenses in estimating the income you need for a $400,000 home. Use our required income calculator above to calculate more variations.

How much do I need to make for a $325,000 house?

A $325,000 house, with a 5% interest rate for 30 years and $16,250 (5%) down will require an annual income of $82,975.

We’re not including monthly liabilities in estimating the income you need for a $325,000 home. To include liabilities and determine what you can afford, use the calculator above.

How much do I need to make for a $300,000 house?

A $300,000 house, with a 5% interest rate for 30 years and $15,000 (5%) down will require an annual income of $77,087.

This calculation is for an individual with no expenses. Use the calculator above to determine the income you need to purchase a $300,000 home.

How much do I need to make for a $250,000 house?

A $250,000 home, with a 5% interest rate for 30 years and $12,500 (5%) down requires an annual income of $65,310.

We’re not including any expenses in estimating the income you need for a $250,000 home. Use our required income calculator above to personalize your unique financial situation.

Required Income for a Mortgage Calculator (2024)

FAQs

How do you calculate qualifying income for a mortgage? ›

Calculating the qualifying income for a salaried employed is fairly straightforward. Take the gross annual salary amount and divided it by 12 months.

What should my income be to get a mortgage? ›

Lenders usually require the PITI (principle, interest, taxes, and insurance), or your housing expenses, to be less than or equal to 25% to 28% of monthly gross income. Lenders call this the “front-end” ratio.

How much do I need to make to qualify for a $300 000 mortgage? ›

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, type of home loan, loan term, and mortgage rate.

Can I afford a 300K house on a 60k salary? ›

An individual earning $60,000 a year may buy a home worth ranging from $180,000 to over $300,000. That's because your wage isn't the only factor that affects your house purchase budget. Your credit score, existing debts, mortgage rates, and a variety of other considerations must all be taken into account.

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

Assuming you have enough in savings to cover the down payment, closing costs and cost of regular upkeep, yes, you probably could afford a $200K home on a $50K annual salary. Using our example above, the monthly mortgage payment on a $200K home, including taxes and insurance, would be about $1,300.

Can I afford a 500k house on 100K salary? ›

The 30% rule for home buyers

If your annual salary is $100,000, the 30% rule means you should spend around $2,500 per month on your house payment. With a 10% down payment and a 6% fixed interest rate, you could likely afford a home worth around $350,000 to $400,000 (depending on the cost of taxes and home insurance).

How much house can I afford if I make $36,000 a year? ›

On a salary of $36,000 per year, you can afford a house priced around $100,000-$110,000 with a monthly payment of just over $1,000. This assumes you have no other debts you're paying off, but also that you haven't been able to save much for a down payment.

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

If you follow the 2.5 times your income rule, you divide the cost of the home by 2.5 to determine how much money you need to earn annually to afford it. Based on this rule, you would need to earn $100,000 per year to comfortably purchase a $250,000 home.

How much house can I afford $40,000 a year? ›

How much house can I afford on 40K a year?
Annual Salary$40,000$40,000
Mortgage Rate7.287%7.287%
Home Purchase Budget (25% monthly income on mortgage payments)$103,800$114,900
Home Purchase Budget (28% monthly income)$109,500$127,600
Home Purchase Budget (36% monthly income)$141,100$159,300
4 more rows
May 10, 2023

Can I afford a 250k house on 40k salary? ›

Quick Rule Of Thumb: Multiply Your Annual Salary By 2.5 or 3

The quickest way to work out how much house you can afford is to multiply your annual pre-tax salary by 2.5 or 3. If you want a conservative estimate, use 2.5. If you want a more aggressive estimate, use 3.

Can I buy a house making 40k a year? ›

With home prices just over $100,000, plus affordable property taxes and homeowner's insurance, you may be able to purchase a home making well under $40,000 per year.

Can I afford a 300k house on a 70K salary? ›

If you make $70K a year, you can likely afford a home between $290,000 and $310,000*. Depending on your personal finances, that's a monthly house payment between $2,000 and $2,500. Keep in mind that figure will include your monthly mortgage payment, taxes, and insurance.

What is a good credit score to buy 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 mortgage payments.

What is the 20% down payment on a $300 000 house? ›

A 20% down payment on a $300,000 mortgage is $60,000. The $60,000 down payment is what most lenders look for especially commercial lenders, because it helps mitigate the risk of default.

How much is 30 dollars an hour annually? ›

If you make $30 an hour, your yearly salary would be $62,400.

How much income do you need to qualify for a $400 000 mortgage? ›

To afford a $400,000 home, assuming a 20% down payment and a 6.5% interest rate on a 30-year mortgage, you would need a gross monthly income of approximately $7,786.55.

How much do you need to make to get a $600000 mortgage? ›

The principal, interest and property mortgage insurance on $600,000 house with a 15% down payment and a 30-year, fixed-rate mortgage with 7% rate would cost $3,662. To afford this, you would need a monthly income of about $13,079 or an annual income of about $157,000.

How much house can I afford if I make $60000 a year? ›

The 28/36 rule holds that if you earn $60k and don't pay too much to cover your debt each month, you can afford housing expenses of $1,400 a month. Another rule of thumb suggests you could afford a home worth $180,000, or three times your salary.

How much house can I afford if I make $70,000 a year? ›

Assuming a 20 percent down payment on a 30-year fixed-rate loan at an interest rate of 7 percent, you can afford the payments on a $240,000 home, according to Bankrate's mortgage calculator.

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