On $250,000 combined household income, you can typically afford a $750,000-$1,000,000 house. Here’s the breakdown.
Quick Answer
| Conservative (28% rule) | Moderate | Aggressive |
|---|---|---|
| $750,000 | $875,000 | $1,000,000 |
Assumes 6.5% interest rate, 20% down payment, typical taxes/insurance
Maximum Monthly Housing Payment
| Rule | Calculation | Max Monthly PITI |
|---|---|---|
| 28% front-end ratio | $250,000 × 0.28 ÷ 12 | $5,833 |
| Conservative (25%) | $250,000 × 0.25 ÷ 12 | $5,208 |
House Price by Down Payment
With a $5,833/month PITI budget:
| Down Payment | Home Price | Loan Amount | P&I Payment |
|---|---|---|---|
| 10% ($85,000) | $850,000 | $765,000 | $4,835 |
| 20% ($180,000) | $900,000 | $720,000 | $4,551 |
| 20% ($200,000) | $1,000,000 | $800,000 | $5,056 |
| 25% ($250,000) | $1,000,000 | $750,000 | $4,740 |
6.5% interest, 30-year fixed
Full Monthly Payment Breakdown
On a $900,000 house with 20% down:
| Component | Amount |
|---|---|
| Principal & Interest | $4,551 |
| Property Tax | $925 |
| Homeowners Insurance | $540 |
| PMI (if < 20% down) | $0 |
| Total PITI | $6,016 |
That’s 29% of gross income — slightly over the 28% guideline.
Jumbo Loan Reality
Houses in this range require jumbo loans:
- Minimum down payment: Often 10-20%
- Credit score: Usually 700+ required
- Reserves: 6-12 months of payments in savings
- DTI limits: Stricter at 38-43%
Where $250K Household Income Fits
| City | Median Home Price | Affordable? |
|---|---|---|
| Dallas, TX | $380,000 | ✅ Very easy |
| Denver, CO | $575,000 | ✅ Comfortable |
| Boston, MA | $800,000 | ✅ On budget |
| San Diego, CA | $900,000 | ⚠️ At limit |
| San Francisco | $1,400,000 | ❌ Over budget |
Even at $250K combined, SF and NYC remain challenging.
The Opportunity Cost of Max Housing
| Housing Choice | Available for Investing |
|---|---|
| Buy $750K house | $3,000+/month |
| Buy $900K house | $1,500/month |
| Buy $1M house | $500/month |
Building wealth vs. maximizing house size is a real trade-off.
Before Buying at $900K+
Pre-flight checklist:
- ✅ Emergency fund: 6+ months expenses
- ✅ Retirement: Both maxing 401(k)s
- ✅ Job stability: Both secure
- ✅ Monthly cash flow: Still positive
- ✅ Other goals: Still saving for kids, travel, etc.
