What salary do I need to afford a $1 million home?

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If you’re in a high-cost-of-living area, owning a home might seem like a distant dream. After all, places like San Francisco, Manhattan, and California's Orange County have average home prices of more than $1 million.

How much salary to afford a $1 million home do you need? There are a lot of variables, but in general you can afford a $1 million home on a salary of $250,000 or more.

In most U.S. housing markets, you’ll need a jumbo loan to buy a home in this price range. Rocket Mortgage offers Jumbo Smart loans that can help you buy homes with large mortgages.

In this guide, we’ll talk about how much you really need to earn, how to buy a million-dollar home, different factors that can affect your affordability, and how to get a loan for a high-value home.

The answer: About $250,000 per year or more

Multiple example calculations estimate you'd need a salary of at least $250,000 per year to afford a million-dollar home.

If you can afford a higher down payment, you can borrow less and reduce your monthly payment. You also could buy discount or mortgage points up front to reduce your interest rate and your monthly payment, allowing you to afford a million-dollar home with less salary.

To discover how much you can afford based on your current income and financial situation, visit the home affordability calculator from Rocket Mortgage and enter your information.

What factors determine how much I can afford?

Lenders use a lot of information to determine how much house you can afford, including your credit, down payment, mortgage rate, and debt-to-income ratio (DTI). Here’s what you need to know:

• Credit score. You may need to meet a minimum credit score requirement, depending on the type of loan you are applying for. Conventional loans no longer require a specific minimum credit score, but lenders do evaluate and consider your credit history when deciding whether to offer you a loan and what interest rate you'll pay. A score in the 700s or higher will help you access better interest rates.
• Down payment. Your loan amount is the purchase price minus your down payment. The larger your down payment, the lower your mortgage payment, allowing you to buy a more expensive home. Additionally, putting 20% or more down on a conventional loan allows you to avoid paying for private mortgage insurance.
• Closing costs. Like your down payment, closing costs are another up-front cost of homeownership. You’ll generally pay between 3% and 6% of the loan amount in closing costs, in addition to your down payment.
• Debt-to-income ratio. Your DTI ratio measures how much of your gross monthly income goes toward debt payments. You’ll usually need a DTI ratio of 36% or less to buy a home, but it can be as high as 45% in some cases.
• Interest rates. Your mortgage rate directly affects your monthly payment. A high interest rate makes your loan more expensive and reduces the amount you can afford to pay. You can buy mortgage points, also known as discount points, to reduce your rate when you get a mortgage.
• Loan term. Your loan term is the number of years over which you’ll repay the loan. Most mortgages have 15-year or 30-year terms. A 15-year loan has considerably higher monthly payments, since you’re paying off your loan in half the time. As a result, you likely can’t afford as expensive a home if you go that route. However, a 30-year loan likely will cost you more in total interest.
• Property taxes and homeowners insurance. Most mortgage payments are made up of principal, interest, property taxes, and insurance (known as PITI). The amount you’ll pay in property taxes is determined by your local government. Homeowners insurance rates also vary depending on where you live. These two factors can add a significant amount to your loan payment, which can reduce the amount you can afford to pay for principal and interest.
• Homeowners association fees. If the home you're buying is part of a homeowners association, you'll have to pay HOA fees.

Remember that, as a borrower, you can also use these factors to decide how much house you feel comfortable buying. You don’t have to spend the maximum amount your lender approves you for. It’s important to consider your entire financial situation, including other expenses and savings goals.

The 28/36 rule

The 28/36 rule is a rule of thumb that can help you budget for housing.

This rule says:

• No more than 28% of your gross monthly income should go toward your housing costs, which include your mortgage payment for principal and interest, property taxes, and homeowners insurance.
• No more than 36% of your gross monthly income should go toward all your debts, including your housing costs, credit cards, student loans, and auto loans.

For example, if you have a monthly income of $10,000, you should aim to spend $2,800 or less on your housing payment and $3,600 on all debt combined.

Of course, the 28/36 rule doesn’t consider all factors, and it’s not a hard-and-fast rule to follow. Some borrowers may have higher expenses elsewhere in their budget – child care is one example – meaning they need to spend less than 28% of their income on housing. Meanwhile, someone with minimal other expenses may feel comfortable exceeding 28%.

$1 million home mortgage examples

Say you buy a $1 million home with 10% down and a 30-year fixed-rate jumbo loan with an interest rate of 5.625%. Your down payment would be $100,000. Assuming you paid 4.5% of the loan amount in closing costs, that would require you to pay $40,500 at closing. Assuming the average homeowners insurance premium for a million-dollar home is $5,000 per year, an average effective property tax rate of 0.87%, and $585 per month for private mortgage insurance, the monthly payment would be $6,323. If you follow the 28% rule, your monthly income that could afford that payment would be $22,581, for an annual income of $270,967.

Alternatively, if you were to buy a $1 million home in a high-cost county, you could make a 5% down payment and get a 30-year fixed-rate conforming conventional loan at 6.5% interest. Your down payment and 4.5% closing costs would total $92,750. Again, assuming $5,000 per year for homeowners insurance, an effective property tax rate of 0.87, and $912 a month for PMI, the monthly payment would be $7,222. Following the 28% rule, you'd need a monthly income of $25,794, which comes to an annual income of $309,528.

How much down payment do I need for a $1 million home?

While a 20% down payment allows borrowers to avoid paying for PMI, that’s not realistic for many borrowers – especially when buying a $1 million home. According to the National Association of REALTORS®, the average down payment for a first-time buyer was 9% in 2024.

The minimum down payment for a conforming conventional loan is 3% for fixed-rate loans and 5% for adjustable-rate mortgages (ARMs)¹. However, lenders may require more, especially for large mortgages.

For jumbo loans, many lenders require a down payment of at least 10%.

This down payment calculator from Rocket Mortgage can help estimate the amount of cash you need to buy a home, based on your home price, down payment, and closing costs.

Mortgage types for a $1 million home

The type of mortgage you’ll need for a $1 million home depends on where you live.

The Federal Housing Finance Agency sets the conforming loan limits each year. These loan limits apply to conventional loans backed by Fannie Mae and Freddie Mac. For 2026, the conforming conventional loan limit is $832,750 in most counties and $1,249,125 in designated high-cost counties.

Only 13 states and the District of Columbia have counties with the high-cost loan limit. If you're buying a home in one of these counties, you can buy a $1 million home with a conventional conforming loan. If you live elsewhere, you’ll need to use a jumbo loan.

You may be able to buy a $1 million home with an FHA or VA loan. Loan limits on FHA loans in 2026 range from $541,287in most counties to $1,249,125 in counties with the maximum conforming loan limit. VA loans aren’t subject to loan limits, as of 2020. You can buy a home of any price with no down payment if you meet the other loan requirements.

Do I need a jumbo loan to buy a $1 million home?

Whether you need a jumbo loan to buy a $1 million home depends on where you live.

For example, someone located in Cook County, Illinois, where Chicago is located, would need a jumbo loan to buy a $1 million home, as the conforming loan limit is $806,500. Meanwhile, someone living in Los Angeles County could buy a $1 million home with a conforming loan because it's a high-cost county.

The FHFA has a map on its website to help you find the conforming loan limit for your area.

If you’re on the border of needing a jumbo loan, a larger down payment may allow you to borrow less than the conforming loan limit and avoid a jumbo loan. For example, a 20% down payment on a $1 million home would result in a loan of $800,000, which is below the conforming loan limit nationwide.

Jumbo loan requirements

Because jumbo loans aren’t backed by the government and can't be sold to Fannie Mae or Freddie Mac, lenders set their own loan limits and requirements. While this creates an added layer of flexibility, these loans often have stricter requirements. Here’s what you’ll typically need:

• Credit score. Many lenders require a credit score of at least 700 to qualify for a jumbo loan. Lenders also will look for red flags on your credit report, such as missed or late payments.
• Down payment. Down payment requirements for jumbo loans typically start around 10%, but some lenders may require as high as 30%.
• DTI ratio. You’ll usually need a DTI ratio of no more than 43% to qualify for a jumbo loan, which is similar to the requirement for conforming loans.
• Savings. In addition to other requirements, many lenders want borrowers to have significant cash reserves to qualify for a jumbo loan. You may need to save as many as 12 months' mortgage payments (or more).

The bottom line: Your salary isn’t the only thing to consider for a $1 million home

A $1 million home may seem like a dream, but it’s the average home price in many parts of the United States. And you might be surprised to learn just how much you can afford based on your salary and other expenses.

When it comes to buying a $1 million home, location is everything. It determines how much you’ll pay for an average home, as well as whether you qualify for a conforming loan on your $1 million home (or whether you’ll need a jumbo loan).

If you’re ready to take the next step to homeownership and find out how much home you can afford, start your mortgage application today with Rocket Mortgage.

¹The 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.

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