On $200,000 combined household income, you can typically afford a $600,000-$800,000 house. Here’s the breakdown.
Quick Answer
| Conservative (28% rule) | Moderate | Aggressive |
|---|---|---|
| $600,000 | $700,000 | $800,000 |
Assumes 6.5% interest rate, 20% down payment, typical taxes/insurance
Maximum Monthly Housing Payment
| Rule | Calculation | Max Monthly PITI |
|---|---|---|
| 28% front-end ratio | $200,000 × 0.28 ÷ 12 | $4,667 |
| Conservative (25%) | $200,000 × 0.25 ÷ 12 | $4,167 |
House Price by Down Payment
With a $4,667/month PITI budget:
| Down Payment | Home Price | Loan Amount | P&I Payment |
|---|---|---|---|
| 10% ($70,000) | $700,000 | $630,000 | $3,982 |
| 20% ($140,000) | $700,000 | $560,000 | $3,539 |
| 20% ($160,000) | $800,000 | $640,000 | $4,045 |
| 25% ($200,000) | $800,000 | $600,000 | $3,792 |
6.5% interest, 30-year fixed
Full Monthly Payment Breakdown
On a $700,000 house with 20% down:
| Component | Amount |
|---|---|
| Principal & Interest | $3,539 |
| Property Tax | $725 |
| Homeowners Insurance | $420 |
| PMI (if < 20% down) | $0 |
| Total PITI | $4,684 |
That’s 28% of gross income — at the recommended limit.
Jumbo Loan Considerations
At $700K+, you may need a jumbo loan in most markets:
- Conforming limit: $766,550 (most areas)
- Higher down payment often required (10-20%)
- Stricter credit requirements (700+ score)
- More documentation required
The Two-Income HCOL Challenge
| City | Median Home Price | % of Budget |
|---|---|---|
| Phoenix, AZ | $445,000 | ✅ 63% |
| Austin, TX | $450,000 | ✅ 64% |
| Denver, CO | $575,000 | ✅ 82% |
| Seattle, WA | $850,000 | ⚠️ 121% |
| San Francisco | $1,400,000 | ❌ 200% |
$200K combined still struggles in top-tier HCOL metros.
Financial Health Check Before Buying
Before maxing your budget at $800K:
- ✅ Are you both maxing 401(k)s ($46,000 combined)?
- ✅ 6+ month emergency fund in place?
- ✅ Can one income cover mortgage if needed?
- ✅ No high-interest debt?
