How much house can I afford on $300K?

If you’ve worked hard to build a solid financial life, you may be wondering how much house can I afford with a $300k salary? Since the median salary in the United States was just over $60,000 a year in 2024, you can be less concerned about whether you can afford a home and more about how much you can afford to spend on one.

How lenders determine your borrowing limit

To understand how much you should budget for buying a home, it helps to know how much a mortgage lender is likely to let you borrow.

Income and debt

Make no mistake – income is important. When you apply for a mortgage, your lender will want to verify both your income and how much debt you have.

Expect your lender to ask for copies of your pay stubs, income tax returns, profit-and-loss statements if you own a business, and other documents that confirm your income. They also will ask you how much debt you have, and verify that information by pulling your credit history.

Lenders will use this information to calculate your debt-to-income ratio. Your DTI ratio is determined by adding up your minimum monthly debt payments, dividing it by your gross monthly income, and multiplying by 100 to get a percentage. The result shows how much of your income is taken up by your debt payments.

The lower your DTI ratio, the more room you have in your budget to afford a mortgage payment and comfortably pay your debts.

There are two types of DTI ratios. The front-end DTI ratio compares only your housing costs with your income. An industry rule of thumb is that your front-end DTI ratio should be less than 28%.

The back-end DTI ratio includes your housing costs plus other debts, such as credit card payments, auto loans, student loans, and personal loans. The rule of thumb is that the back-end DTI ratio should be less than 36%, though many lenders allow a DTI ratio as high as 45% or 50%, depending on the loan type and circumstances.

The DTI ratio allows lenders to measure your ability to afford a house without requiring you to have a minimum income.

Credit score

Your credit score is a three-digit number that represents how likely you are to repay your debts, based on your credit history. Credit bureaus calculate the number, which ranges from about 300 to 850, using models such as the FICO® Score or VantageScore^®. The higher your credit score, the more likely you are to repay your debts and the more likely your lender will approve your loan application and offer you a lower interest rate.

Most loan types have a minimum credit score to buy a house. For example, many lenders, including Rocket Mortgage^®, require a credit score of at least 620 to get a conventional loan. Some loans and lenders set slightly higher requirements. Loan programs backed by government agencies such as the Federal Housing Administration and Veterans Affairs allow lower credit scores or set no credit score requirement.

Interest rates

The interest rate on your mortgage determines how much you pay the lender to borrow the money to buy a home. The interest rate affects your monthly mortgage payment and the total interest you pay on your loan. Higher rates increase costs, while lower rates make a home more affordable.

Lenders offer most mortgage types with fixed or adjustable interest rates. A 30-year fixed-rate mortgage has the same interest rate for the entire loan term. This means your payments never change and are predictable. An adjustable-rate mortgage has a fixed rate for an introductory term, usually 3, 5, or 7 years. After this rate expires, your mortgage rate will adjust, usually once a year, according to market conditions. Your rate and your mortgage payment will increase or decrease. ARMs usually have rate caps that limit how much your rate can increase in any one adjustment and overall.

For example, a 30-year $350,000 conforming conventional mortgage with an interest rate of 6.375% has a monthly payment for principal and interest of $2,184. The same loan with an interest rate of 6% would have a monthly payment for principal and interest of $2,098. The same loan with a 7% interest rate would have a monthly payment of $2,329.

Interest rates can change daily. You can check the current interest rates for Rocket Mortgage loans online.

Your ballpark estimate: $1.1 million

So, how much can you afford to buy with a $300k income mortgage? A ballpark estimate using the 28/36 rule puts the answer at just over $1.1 million.

This estimate assumes a 10% down payment and 3% closing costs, requiring $134,553 in cash to close. With a 30-year fixed-rate mortgage at 6.375% interest, you could borrow $1,051,783 and buy a home worth up to $1,151,783.

The monthly payment for principal and interest would be $6,562. You would have to pay an estimated $438 a month for private mortgage insurance, for a monthly total outlay of $7,000 – exactly 28% of your gross monthly income of $25,000. You would need $2,000 or less in monthly debt payments to meet the 36% back-end DTI ratio.

Property taxes, homeowners insurance, utilities, and maintenance would be additional expenses.

You can try out various scenarios using this home affordability calculator from Rocket Mortgage.

Should you borrow as much as you’re approved for?

When you’re ready to shop for a home, applying for mortgage preapproval will get you a letter from your lender estimating how much you likely can borrow and at what interest rate. It can be tempting to max out your budget and spend the entire amount you’re approved for, but that isn’t the best idea.

For example, if you lose your job, it can be hard to handle your mortgage payment if you maxed out your borrowing limit.

Closing costs also depend on the size of the loan, so borrowing the maximum amount requires more money to close.

Finally, while lenders may approve you for a larger loan, many experts recommend keeping your monthly mortgage payment to no more than 28% of your monthly salary. Going over that limit could leave you feeling some financial pressure.

Loan types with a $300K salary

Making $300,000 a year may affect the types of loans that you qualify for.

• Conforming conventional loans. In most parts of the country, conforming loans are limited to $832,750 for a single-unit home in 2026. If you’re borrowing more than that, you’ll need a jumbo loan unless you’re in a designated high-cost county. In those counties, the 2026 conforming loan limit is $1,249,125.
• Jumbo loans. Jumbo loans let you borrow more than the conforming loan limit. However, they can be more difficult to qualify for and may have higher interest rates and down payment requirements.
• FHA loans. These are government-backed loans available to people with lower credit scores and may have lower down payment requirements. However, like conventional loans, FHA loans have limits on how much you can borrow. In many areas, the limit is $524,225 for a single-family home, but it can be as high as $1,209,750 in high-cost areas, so this is only an option if you live in a high-cost area.
• VA loans. VA loans are available to former and current military members. If you’re eligible, they offer competitive interest rates and no down payment requirement.

The bottom line: You can afford a lot of house with $300K, but you may not want to spend to the limit

If you earn $300,000 a year, you can afford a lot of home. Still, it’s important to think carefully about the home you buy and the budget you set. While it can be tempting to borrow as much as you can to buy the biggest, nicest house possible, it may be more prudent to purchase a cheaper home. Doing so will leave you better equipped to handle financial uncertainty in the future.

If you’re ready to start shopping for a home, consider applying for a mortgage with Rocket Mortgage.

This article is for informational purposes only and is not intended to provide financial, investment, or tax advice. You should consult a qualified financial or tax professional before making decisions regarding your retirement funds or mortgage.