How much income do you need to afford a home? Enter a home price, down payment, and mortgage rate to find out the minimum salary required to qualify for a mortgage based on the 28/36 rule.
For full affordability planning and scenario frameworks, start with the Mortgage Affordability hub.
How Much Do You Need to Make to Buy a House?
The income needed to afford a home depends on several key factors: the home price, your down payment, the mortgage interest rate, property taxes, and insurance costs. Lenders typically use the 28/36 rule to determine how much house you can afford — your housing costs should not exceed 28% of your gross monthly income, and your total debt payments should stay below 36%.
With the median home price in the US sitting above $400,000 and mortgage rates at 7.40% (Freddie Mac 30-year average, week of October 8, 2026), the income required to comfortably afford a home has increased significantly in recent years.
The 28/36 Rule Explained
The 28/36 rule is a guideline used by most mortgage lenders to assess borrower affordability:
- 28% Rule: Your total monthly housing costs (mortgage principal, interest, taxes, and insurance) should not exceed 28% of your gross monthly income.
- 36% Rule: Your total monthly debt payments (housing costs plus car loans, student loans, credit cards, etc.) should not exceed 36% of your gross monthly income.
For example, if you earn $80,000 per year ($6,667/month), your maximum housing payment under the 28% rule would be $1,867 per month.
Income Needed by Home Price
How much do you need to earn to afford homes at different price points? This table assumes a 10% down payment, a 7.40% rate on a 30-year fixed loan (Freddie Mac average, week of October 8, 2026), property tax at 1.1% and insurance at 0.5% of the price a year, and PMI at 0.7% of the loan a year; income needed is the payment divided by 28%.
| Home Price | Down Payment (10%) | Monthly Payment | Income Needed |
|---|---|---|---|
| $250,000 | $25,000 | $2,022 | $86,700 |
| $350,000 | $35,000 | $2,831 | $121,300 |
| $450,000 | $45,000 | $3,640 | $156,000 |
| $550,000 | $55,000 | $4,449 | $190,700 |
| $650,000 | $65,000 | $5,258 | $225,300 |
These figures highlight why homeownership has become increasingly difficult for many Americans, particularly first-time buyers earning close to the median income.
How Down Payment Size Affects Required Income
A larger down payment reduces the mortgage amount, which directly lowers the income you need to qualify. It also eliminates private mortgage insurance (PMI) if you put down 20% or more.
| Down Payment | Mortgage on $400,000 Home | Monthly Payment | Income Needed |
|---|---|---|---|
| 5% ($20,000) | $380,000 | $3,386 | $145,100 |
| 10% ($40,000) | $360,000 | $3,236 | $138,700 |
| 15% ($60,000) | $340,000 | $3,086 | $132,300 |
| 20% ($80,000) | $320,000 | $2,749 | $117,800 |
7.40% rate, same assumptions as above.
Saving for a larger down payment takes more time but can dramatically improve your ability to afford a home.
How Mortgage Rates Impact Affordability
Even small changes in mortgage rates have a large impact on the income required to purchase a home. On a $400,000 home with 10% down:
| Mortgage Rate | Monthly Payment | Income Needed |
|---|---|---|
| 5.0% | $2,676 | $114,700 |
| 6.0% | $2,902 | $124,400 |
| 7.0% | $3,138 | $134,500 |
| 7.40% (Oct. 8, 2026 average) | $3,236 | $138,700 |
| 8.0% | $3,385 | $145,100 |
Payment includes property tax, insurance and PMI as above.
A 1% increase in mortgage rates (7.40% to 8.40%) requires roughly $11,000 more in annual income to qualify for the same $400,000 home with 10% down, which is why monitoring mortgage rate trends matters when planning a purchase.
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