How much house can I afford on $120,000?
Based on the 28/36 debt-to-income guideline.
$369,159
home price on a $120,000 salary at 6.5%, 10% down, 28% front-end ratio, no other debt
Affordable price by mortgage rate
| Rate | Home price | 10% down | Max housing cost/mo |
|---|---|---|---|
| 6% | $389,180 | $38,918 | $2,800 |
| 6.5% | $369,159 | $36,916 | $2,800 |
| 7% | $350,718 | $35,072 | $2,800 |
| 7.5% | $333,708 | $33,371 | $2,800 |
Assumes 25% of the housing budget goes to property tax, insurance and PMI. Car loans, student loans and card payments reduce this under the 36% back-end rule.
With other monthly debt (6.5%)
| Other debt/mo | Home price |
|---|---|
| $0 | $369,159 |
| $300 | $369,159 |
| $600 | $369,159 |
| $1,000 | $342,790 |
FAQ
How much house can I afford on $120,000 a year?
Roughly $369,159 at a 6.5% rate with 10% down and no other debt, keeping housing at 28% of gross income ($2,800/month).
What is the 28/36 rule?
Lenders traditionally want housing costs under 28% of gross monthly income and all debt payments under 36%.