With a $60,000 annual salary, you could potentially afford a house priced between $180,000 and $250,000, depending on your financial situation, credit score, and current market conditions. However, this range can vary significantly based on several factors we'll discuss.
To afford a $400,000 house, you typically need an annual income between $100,000 to $125,000, which translates to a gross monthly income of approximately $8,333 to $10,417. However, this is a general range, and your specific circumstances will determine the exact income required.
How much income you need to buy a house in a specific price range largely depends on the type of loan you're applying for, where you live and other factors. For example, at current mortgage rates, borrowers with an FHA loan and a 10% down payment would need to earn about $70,000 a year to afford a $400,000 house.
In short, whether you can afford a $300,000 home on a $60,000 income depends on various financial factors. If your monthly mortgage payment stays at or below $1,400, you might be in a good position to buy.
You'll need a down payment of $12,000, or 3 percent, if you're buying a $400K house with a conventional loan. Meanwhile, an FHA loan requires a slightly higher down payment of $14,000, equivalent to 3.5 percent of the purchase price.
According to the latest data available from the U.S. Census Bureau, the median income in the United States in 2022 was $74,580. While $60K a year is lower than that, it's still considered a good salary for a single person, as they typically have fewer expenses than someone who's supporting a household.
To afford a $500,000 house, you typically need an annual income between $125,000 to $160,000, which translates to a gross monthly income of approximately $10,417 to $13,333, depending on your financial situation, down payment, credit score, and current market conditions.
The standard advice is that you should set aside about 30% of your gross income for rent. So if you make $60,000 a year, your rent should not exceed $1,500. While this might be plenty for an individual living in a low-cost area, it doesn't work for a family in a pricey neighborhood.
$70K can be a good salary for a single person, depending on your circumstances. But if you'd like to stretch your income as much as possible, here are a few ideas: Determine your monthly budget. A budgeting and spending plan that works for your lifestyle and long-term goals is essential.
To afford a $400,000 home, assuming a 20% down payment and a 6.5% interest rate on a 30-year mortgage, you would need a gross monthly income of approximately $7,786.55. This assumes you have $1,000 in monthly debt.
For example, on a $400K mortgage with a 7% fixed rate, the monthly payment on a 15-year loan is $3,595. The payment on a 30-year loan, by comparison, is $2,661.
Following the 28/36 rule, a guideline many mortgage lenders use to gauge how much you can afford, you'd likely need to earn at least $90,000 per year to afford a $350,000 house without spreading yourself too thin. Keep in mind that figure does not include upfront payments, like your down payment and closing costs.
One rule of thumb when buying a home is to not spend more than three times your annual salary. If you earn $60K a year, that means you can afford to spend around $180,000 on a house, maybe a bit more if you have little or no other debts.
A $60,000 annual salary is equivalent to earning a $28.85 hourly wage, or $230.80 each day. This is based on the employee working for eight hours a day, 52 weeks a year.
Assuming a 30-year fixed conventional mortgage and a 20 percent down payment of $80,000, with a high 6.88 percent interest rate, borrowers must earn a minimum of $105,864 each year to afford a home priced at $400,000. Based on these numbers, your monthly mortgage payment would be around $2,470.
To afford a $500,000 house, you'll need to make a minimum of $91,008 a year — and probably more to make sure you're not house-poor and can afford day-to-day expenses, maintenance and other debt, like student loans or car payments.
A family of four needs to earn at least $106,903 a year to cover their necessities in most U.S. states, a recent SmartAsset study reveals. The findings are based on cost estimates for housing, child care, transportation, health care, taxes and other common expenses, as tracked by the MIT Living Wage calculator.
Down payment amounts for a $400,000 house can range from 0% to 20% or more. The required down payment depends on the type of mortgage you choose. Conventional loans typically require 3-20% down for a $400,000 house. Government-backed loans like FHA, VA, and USDA have different down payment requirements.
Monthly payments on a $500,000 mortgage by interest rate
At a 7.00% fixed interest rate, your monthly mortgage payment on a 30-year mortgage might total $3,327 a month, while a 15-year might cost $4,494 a month.
Considering that the average cost of a house in America is currently hovering around $370,000, our $500,000 price should give us a fairly average size house with plenty to spare.
A $60K salary is around $14,000 less than the median household income in the country — $74,580, per the most recent Census data — which falls in the bottom half of earners.
If you make $80,000 a year, your hourly salary would be $38.46.
A household in a metropolitan area with a higher-than-average cost of living, or one with more than three people, needs more than $56,600 to be included in the middle-income tier. Households in less expensive areas or with fewer than three people need less than $56,600 to be considered middle income.