How much house can you afford with a $100K salary?

Important Legal Disclosure:

Any figures, interest rates, loan examples, and market data referenced in this article are hypothetical or aggregated for educational purposes only. They are not intended to reflect current pricing, available terms, or personalized loan options for any consumer. This content does not constitute an advertisement of credit terms, a solicitation or offer to extend credit, or a rate quote under federal or state lending laws. Actual mortgage rates and terms are determined by individual financial qualifications, property characteristics, market conditions, and other factors, and are subject to change without notice.

If you are seeking current, real-time mortgage rate information please refer to the official live rate information and product details published at RocketMortgage.com/rates, where current pricing and various loan terms are made available.

If you have a salary in the six-figure range, you have a good chance of buying a home. A salary of $100,000 is well above the median salary of $63,933 reported by the Social Security Administration for 2023. With manageable debt, you should be able to afford a home.

Given 2026 prices, a salary of $100,000 will still be a challenge in some markets, although it is possible to afford the median home price of $410,800. In some areas, such as Detroit or Wichita, Kansas, this salary should enable you to purchase a single-family home, while in others, it may be more challenging. However, it's essential to recognize that income is just one factor that influences how much house you can afford. Nevertheless, it's a fair question to ask: How much house can I afford with a $100K salary?

The answer: $300K – $450K

If you have an annual salary of $100,000, you can generally afford a house price between $300,000 and $450,000. The exact value of a home that you can afford will depend on factors such as your down payment, the type of loan you use, your loan term, your credit history, your debt load, and market conditions.

According to the Rocket Mortgage affordability calculator, with the following variables, a person can comfortably afford a home around $318,000.¹

• Annual income of $100,000
• $20,000 cash to buy
• $1,250 monthly debt
• Credit score over 720
• Debt-to-income ratio (DTI) of 45%
• Interest rate of 5.99%

You can use the affordability calculator to get an idea of how much house you can afford, taking into account your specific situation. Enter your information and get an estimate of what your housing budget should be.

Estimating how much house you can afford with $100K

While affordability calculators can give you a range of how much house you can afford with a salary of $100K, lenders will look at a few other factors.

The approval amount you'll receive with a mortgage qualification will likely depend on factors such as your income, current debts, and available cash.

There are some formulas you can use to estimate what a responsible mortgage payment is for you, which we will discuss below.

The 28% rule

One of the basic rules used by many experts to give a guideline on how much you can afford when buying a home is that the mortgage payment should comprise no more than 28% of your monthly income before taxes. Based on this, if you have a $100,000 annual salary, your mortgage payment should be no more than $2,333.33 per month. The 28% rule is sometimes referred to as the front-end ratio.

The 28% rule is often combined with a rule that states no more than 36% of your monthly income should be allocated to all your debt payments, including your mortgage. The 36% rule is sometimes referred to as the back-end ratio, and together it's known as the 28/36 rule.

Some lenders may allow you to have a monthly mortgage payment that is higher than this, but it would be considered a stretch, meaning it may be easier to get into trouble making your payment if your financial situation changes.

Mortgage breakdown with a $100K salary

Applying the 28% rule, we can see how much home you can afford with various loan terms, interest rates, and down payment amounts.

The following table shows how down payment, loan term, and interest rate affect how much house you can afford.

Additionally, you can reduce your interest rate and your monthly payment by buying mortgage points. This can allow you to borrow more with a larger up-front investment.

Remember, the monthly payment in this example is only for principal and interest. You also will need to pay property tax, homeowners insurance premiums, and possibly mortgage insurance and homeowners association fees.

Factors that determine how much house you can afford

Several factors determine how much house you can afford. Here's a look at some of the things that influence how a lender will look at your application.

• Credit: Having better credit will help you secure better interest rates.
• Down payment: The down payment required may vary depending on your lender and the type of loan you have. The larger your down payment is, the lower your loan amount will be. If you're using a conventional loan, a down payment of 20% gets rid of PMI.
• Closing costs: Closing costs range between 3% and 6% of your loan amount, varying by state. You must pay these costs in addition to your down payment.
• DTI: Lenders prefer a DTI below 36% but may accept a ratio of up to 43% or more in some circumstances.
• Current interest rates: Current mortgage rates are one of the most important factors in determining how much house you can afford. Interest rates directly determine the monthly cost of having your loan. You can buy points to reduce your interest rate and save money in the long run.
• Mortgage terms: A 30-year fixed-rate mortgage offers a lower monthly payment, but you'll pay more interest over the life of the loan. A 15-year mortgage is overall less expensive but requires a higher monthly payment.
• Taxes and insurance: Property taxes and homeowners insurance depend on factors like home size and ZIP code. They can add a significant amount to your total monthly mortgage payment.
• Location and amenities: The location of the home has a significant influence on how much you can afford. Homes with similar square footage and the same number of bedrooms will cost a wildly different amount in Tulsa, Oklahoma, as compared to Los Angeles, for example.

Mortgage options with a $100K salary

Another factor affecting how much home you can afford is the type of mortgage you use and whether you qualify for a first-time home buyers program or down payment assistance.

Loan types

With a $100K annual income, you’ll have several types of mortgages to choose from. Each loan type comes with its own credit and down payment requirements, and some are available only to specific buyers, such as military personnel or veterans. Below are a few of the most common choices:

• Conventional loans: Conventional loans are not backed by a government program. They’re the most common type of mortgage used and typically require a DTI of up to 50%, and a minimum down payment of 3% for a fixed-rate loan and 5% for an adjustable-rate loan.² A minimum credit score is no longer required, but lenders still will evaluate your credit history.
• FHA loans: Backed by the Federal Housing Administration, FHA loans have flexible credit and down payment options. Lenders such as Rocket Mortgage offer FHA loans to borrowers with a minimum credit score of 580 and a 3.5% down payment.³ Other lenders may offer FHA loans to borrowers with a credit score between 500 and 579 with a 10 % down payment. This makes FHA loans popular with first-time buyers and borrowers with less-than-perfect credit.
• USDA loans: Guaranteed by the U.S. Department of Agriculture, these loans help low- to mid-income borrowers buy homes in eligible rural areas with no minimum down payment. While there’s no official minimum credit score, most lenders prefer scores between 580 and 620. Rocket Mortgage^® does not currently offer USDA loans.
• VA loans: Offered through the Department of Veterans Affairs, VA loans let eligible military personnel, veterans, and their qualifying spouses purchase a home with no down payment.⁴ While the VA itself sets no minimum credit score, many lenders look for at least a 620 credit score.

First-time home buyer programs

Federal and state programs for first-time home buyers offer assistance with down payments and closing costs. These programs are usually targeted to low- and moderate-income borrowers. Some programs also provide special loan options featuring lower interest rates and more flexible terms. Eligibility varies by program, but many require that your income falls within specific limits.

One+ by Rocket Mortgage^® is one example of a program designed to support first-time buyers.⁵ It helps make homeownership more accessible by allowing you to purchase a home with as little as 1% down.

The bottom line: A $100K salary can buy a good house

If you're making $100,000 a year, you're in good shape to find a home that works in your price range in many areas across the country. The key is to ensure that you've analyzed your budget and considered all relevant factors. In addition to your income, you'll want to be aware of your credit score and DTI, which are significant factors in determining your interest rate and monthly mortgage payment amount.

If you’re ready to start the home buying process, start a mortgage application today with Rocket Mortgage.

¹This is an estimate only and is not a substitute for the qualification process for credit. Results are based on a 30-Year Fixed conventional mortgage with an interest rate of 5.99% and closing costs that are 2.9% of the loan amount. Most mortgages require that your debt-to-income ratio doesn't exceed 43%. Property taxes are based on the tax rate of the location entered. If a rate isn't found, we've assumed a 1.25% tax rate. Homeowners' insurance is based on the average insurance costs of the location entered. If an average isn't found, we've assumed a payment of $67 a month. Results are not a commitment to lend and don't guarantee an approval or denial for credit.

²The 3% down payment option is only available on certain conventional loan products and is not available in all states. Additional terms and conditions may apply.

³To qualify for this offer, you must meet all standard FHA eligibility requirements. In addition, your total mortgage payment, including taxes and insurance, cannot exceed 38% of your income, your debt-to-income (DTI) ratio cannot exceed 45%, and you must have 12 months of verifiable housing history immediately prior to your application, no late payments 30 days or greater in the last 12-months, and no derogatory marks on your credit report. Not available on jumbo loans. Asset statements may be needed, no more than 1 day of non-sufficient fund fees are allowed in the most recent 2 months prior to application. Additional restrictions/conditions may apply.

⁴Rocket Mortgage is a VA-approved lender, not endorsed or sponsored by the Dept. of Veterans Affairs or any government agency.

⁵Client will be required to pay a 1% down payment, with the ability to pay a maximum of 3%, and Rocket Mortgage will cover an additional 2% of the client’s purchase price as a down payment, or $2,000. Maximum grant amount is $7,000. Offer valid on primary residence, conventional loan products only. Maximum loan amount of $350,000. Cost of mortgage insurance premium passed through to client effective January 2, 2024. Offer valid only for home buyers when qualifying income is less than or equal to 80% area median income based on county where property is located. Not available with any other discounts or promotions and cannot be retroactively applied to previously closed loans or loans that have a locked rate. This is not a commitment to lend. Rocket Mortgage reserves the right to cancel/modify this offer at any time. Additional restrictions/conditions may apply.