How much income do I need to afford a $150K house?

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If you’re in the market for a house but you have limited income, you’ve likely wondered how much house you can afford. Is a $150,000 home within reach?

Though $150,000 is far below the median U.S. home price ($433,275 as of November 2025), you may find homes around this low price in some markets.

How much income you need to afford a $150,000 home, however, depends on the lender and many loan- and borrower-related factors.

Read on to learn more about the typical income needed to afford a $150,000 home loan payment and how to determine its financial feasibility.

Quick answer: Between $30,834 and $37,383 per year

Calculating the income required for a $150,000 home can be complex, as it depends on the mortgage type, interest rate, down payment amount, and other individual financial factors.

As a rule, however, you shouldn’t spend more than 28% of your gross monthly income on housing, including principal, interest, property taxes, homeowners insurance, and any homeowners association (HOA) fees. This is often called the 28% rule.

Assuming you make a 3% – 20% down payment and secure a 6% interest rate on a 30-year fixed-rate mortgage, you’d need an annual income of anywhere from $30,834 to $37,383 to afford a $150,000 home while maintaining the 28% rule (not accounting for any property tax, PMI, home insurance, or HOA costs).

Use a loan calculator to calculate your mortgage costs and then extrapolate from there how much income you need for your housing costs to stay below 28% of your gross income.

What factors determine how much you can afford?

Many things help define how much house you can afford. But with the Rocket Mortgage® home affordability calculator, you can determine a budget based on your unique situation.

Here are all the home affordability factors to pay attention to:

• Down payment: The higher your down payment, the lower the loan amount and the monthly payment. Plus, putting down at least 20% avoids conventional private mortgage insurance (PMI).
• Closing costs: These are usually 2% – 5% of the purchase price, which would be $3,000 to $7,500 for a $150,000 home.
• Mortgage type: The type of mortgage (such as conventional vs. FHA loan) and the term (such as 30 vs. 15 years) can impact monthly payment affordability.
• Mortgage rate: The higher the interest rate attached to your mortgage, the more expensive the monthly payment will be on a $150,000 home.
• Credit score: While the common minimum credit score to get a mortgage is 620, having a higher score can lead to better mortgage rates and lower payments.
• Homeowners insurance: This cost will vary by location, disaster risk, policy options, and other factors. In 2024, the typical homeowner paid $3,303 per year for homeowners insurance.
• Property taxes: These will vary by location and home value. In 2023, the average countywide annual property tax in the U.S. was $1,889.
• HOA fees: These help cover the costs of amenities and other expenses associated with properties in an HOA. In 2024, the national median monthly HOA fee was $135.
• Location: Location will affect home pricing and the value for your budget.
• Maintenance and repairs: Plan to spend at least 1% of your home’s purchase price ($1,500 for a $150,000 home) on maintenance and repairs each year.
• Available assistance: Home buyer assistance programs may provide grants to help cover the down payment and/or closing costs, making a $150,000 home more affordable.

An income breakdown: What salary do I need to afford a $150K home?

Ultimately, different buyers will have different preferences with their budgets. For example, you may be more comfortable stretching your budget than others (and vice versa).

Whatever you do, learn the guidelines for calculating the income you need for a $150,000 home and explore your mortgage options based on different scenarios.

What percentage of my income should go to my mortgage?

As a rule, no more than 28% of your gross monthly income should go toward housing costs, and no more than 36% should go toward your total debt payments (including housing). Together, these guidelines are called the 28/36 rule. They’re also sometimes referred to as your front-end debt-to-income ratio (DTI) or housing expense ratio and your back-end DTI.

For example, assume you earn $60,000 per year. Here’s what your front-end and back-end ratios would look like:

• Monthly income: $60,000/12 = $5,000
• Front-end ratio: $5,000 x .28 = $1,400 for total housing costs
• Back-end ratio: $5,000 x .36 = $1,800 for total monthly debts, including housing costs

That said, lenders and loan programs vary in the maximum front- and back-end ratios they accept. For instance, a conventional loan may be approved with a higher back-end ratio of up to 50%, while FHA loans may allow up to 57%.

Either way, assessing a home’s long-term affordability is essential.

$150K mortgage examples

To determine your target annual income for a $150,000 home’s mortgage, plug your financial details into the following formula:

(Payment ÷ Maximum DTI + Other monthly debts) × 12 = Target annual income.

Not sure what your monthly payment would be? Use the Rocket Mortgage payment calculator.

Below are mortgage payment amounts and income targets for a $150,000 home with a 6% mortgage rate:

Here are mortgage payment amounts and income targets for a $150,000 home with a 7% mortgage rate:

When deciding which mortgage payment you could comfortably afford, don’t forget to consider extra housing costs, such as property taxes, homeowners insurance premiums, and HOA fees, as well as non-housing expenses.

What down payment is required for a $150K house?

How much money you need for a down payment on a $150,000 home varies by loan type. To avoid paying private mortgage insurance (PMI) on a conventional mortgage, put down at least 20%. However, you can also put down as little as 0% with some government-backed loans.

That said, a large down payment will reduce your loan amount and lead to a better interest rate and less interest paid over time, no matter the loan program. Use the Rocket Mortgage down payment calculator to see how much cash you’ll need for different down payment percentages.

Here’s how much you’ll need to put down for different loan types and scenarios:

Tips for buying a $150K home

To improve your ability to buy a $150,000 home, follow these best practices:

• Review your budget: You should have a household budget that includes your income and expenses so you can determine how much you can realistically afford for a mortgage payment.
• Improve your credit score: A higher credit score pays off with a better mortgage rate and lower mortgage payment, so take steps to improve yours by paying bills on time and maintaining a healthy credit utilization ratio.
• Pay down your existing debt: This will lower your debt-to-income ratio (DTI), which is important for mortgage approval, and frees up room in your budget for mortgage payments.
• Save for a down payment: Start early and explore grants and other assistance options. Additionally, look for ways to lower your expenses and boost your income so you can accumulate down payment funds more quickly. Remember, a larger down payment means a smaller loan and a more manageable mortgage payment.
• Get preapproved: Getting preapproved shows you how big a mortgage you’d qualify for and at what interest rate. It’s also helpful for standing out to sellers in competitive markets.

The bottom line: Consider more than income before buying a $150K home

To afford a $150,000 home, you’ll generally need an annual income between $30,834 and $37,383, depending on your down payment, interest rate, and other financial factors.

However, you also need to account for closing costs and ongoing expenses like property taxes, homeowners insurance, and maintenance. The 28/36 rule provides a helpful guideline: keep housing costs below 28% of your gross monthly income and total debt payments under 36%.

Before committing to a mortgage, take time to crunch the numbers based on your unique financial situation. Use mortgage calculators to estimate your monthly payments and ensure you’ll have enough cushion for unexpected expenses and other financial goals.

When you're confident you can comfortably afford a $150,000 home and are ready to move forward, apply for a mortgage.

The 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.

To 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.