The average monthly mortgage payment was $1,487 in 2019, according to the U.S. Census Bureau's American Housing Survey. The median monthly mortgage payment was $1,200, according to the 2019 Census housing data.
The average mortgage payment is $2,064 on 30-year fixed mortgage, and $3,059 on a 15-year fixed mortgage. However, a more accurate measure of what the typical American spends on their mortgage each month would be a median: $1,609 in 2019, according to the US Census Bureau.
The 28% rule states that you should spend 28% or less of your monthly gross income on your mortgage payment (e.g. principal, interest, taxes and insurance). To determine how much you can afford using this rule, multiply your monthly gross income by 28%.
Monthly payments for a $400,000 mortgage
On a $400,000 mortgage with an annual percentage rate (APR) of 3%, your monthly payment would be $1,686 for a 30-year loan and $2,762 for a 15-year one.
That's become increasingly challenging, with the average American monthly mortgage payment rising to the highest level ever. It's now $1,230 per month for a 30-year, fixed-rate loan, according to data from home-listing site Zillow. That's up 36% from the average of $905 a year ago and a 6% increase from January.
So how much non-mortgage debt do Americans have? According to Northwestern Mutual's 2021 Planning & Progress Study, U.S. adults aged 18 and over who carry debt hold an average of $23,325 outside of their mortgages.
According to Brown, you should spend between 28% to 36% of your take-home income on your housing payment. If you make $70,000 a year, your monthly take-home pay, including tax deductions, will be approximately $4,530.
If you have a 20% down payment on a $100,000 household salary, you can probably comfortably afford a $560,000 condo. this number assumes you have very little debt and $112,000 in the bank.
For homes in the $800,000 range, which is in the medium-high range for most housing markets, DollarTimes's calculator recommends buyers bring in $119,371 before tax, assuming a 30-year loan with a 3.25% interest rate.
The Income Needed To Qualify for A $500k Mortgage
A good rule of thumb is that the maximum cost of your house should be no more than 2.5 to 3 times your total annual income. This means that if you wanted to purchase a $500K home or qualify for a $500K mortgage, your minimum salary should fall between $165K and $200K.
If you make $3,000 a month ($36,000 a year), your DTI with an FHA loan should be no more than $1,290 ($3,000 x 0.43) — which means you can afford a house with a monthly payment that is no more than $900 ($3,000 x 0.31). FHA loans typically allow for a lower down payment and credit score if certain requirements are met.
To purchase a $300K house, you may need to make between $50,000 and $74,500 a year. This is a rule of thumb, and the specific salary will vary depending on your credit score, debt-to-income ratio, the type of home loan, loan term, and mortgage rate.
HOMEOWNER AND RENTER TRENDS
A large majority of older households—76.2 percent of households age 50 and over, and 78.7 percent of house- holds age 65 and over—own their homes. With the aging of the baby boomers, 63 percent of US homeowners are now at least age 50 and 31 percent are at least age 65.
The Average Canadian Mortgage Payment Is Lower Than Rent
Monthly mortgage payments reached an average of $1,390 in Q4 2021, up 3.0% from the previous quarter. Over the past five years, prices are 16.3% higher. A sharp climb, but still less than the average rental price for an apartment.
Monthly payments for a $250,000 mortgage
On a $250,000 fixed-rate mortgage with an annual percentage rate (APR) of 4%, you'd pay $1,193.54 per month for a 30-year term or $1,849.22 for a 15-year one.
The usual rule of thumb is that you can afford a mortgage two to 2.5 times your annual income. That's a $120,000 to $150,000 mortgage at $60,000.
Safe debt guidelines
So start by doing the math. If you make $50,000 a year, your total yearly housing costs should ideally be no more than $14,000, or $1,167 a month. If you make $120,000 a year, you can go up to $33,600 a year, or $2,800 a month—as long as your other debts don't push you beyond the 36 percent mark.
High Balance Conforming Loans
With 20% down, homes valued from $685,314 to $1,027,969.00 fall into this loan category. The final sales price of a home would need to be no greater than $905,750.00 to achieve that $4,000 a month mortgage.
If you make $100,000 per year, your hourly salary would be $51.28. This result is obtained by multiplying your base salary by the amount of hours, week, and months you work in a year, assuming you work 37.5 hours a week.
For the couple making $80,000 per year, the Rule of 28 limits their monthly mortgage payments to $1,866. Ideally, you have a down payment of at least 10%, and up to 20%, of your future home's purchase price. Add that amount to your maximum mortgage amount, and you have a good idea of the most you can spend on a home.
I make $85,000 a year. How much house can I afford? You can afford a $255,000 house.
Results. A salary of $70,000 equates to a monthly pay of $5,833, weekly pay of $1,346, and an hourly wage of $33.65.
For example, if you budget for a monthly housing payment of $2,500 with two percent annually going to taxes and insurance, assuming the current 30-year mortgage rate is 4%, the math “worked backwards” reveals a maximum home purchase price of $385,000.
That said, if you make $200,000 a year, it means you can likely afford a home between $400,000 and $500,000.