House Affordability Calculator · Practical guide
Income Needed to Afford a $400K House
About $106,000 a year with 20% down at 6.5%. Full payment breakdown, price table, and what moves the bar.
At a glance
The Short Answer
You need to earn about $106,000 a year to comfortably afford a $400,000 house with 20% down, a 6.5% 30-year mortgage, 1.2% property tax, and $1,500 annual insurance — assuming little or no other debt. That keeps the payment at 28% of gross income under the 28/36 rule.
Interactive tool
House Affordability Calculator
Enter your own values, then compare the result with the examples below.
The Payment Breakdown
Twenty percent down on $400,000 leaves a $320,000 loan:
| Component | Monthly Cost |
|---|---|
| Principal and interest (6.5%, 30 yr) | $2,022.61 |
| Property tax (1.2% of loan) | $320.00 |
| Homeowners insurance | $125.00 |
| Total housing payment | $2,467.61 |
Applying the 28% rule: $2,467.61 / 0.28 = $8,813 of monthly income, or $105,755 a year.
Income Needed at Other Prices
Same assumptions, no other debt:
| Home Price | Loan (20% Down) | Monthly Payment | Income Needed |
|---|---|---|---|
| $300,000 | $240,000 | $1,881.96 | $80,700 |
| $400,000 | $320,000 | $2,467.61 | $105,800 |
| $500,000 | $400,000 | $3,053.26 | $130,900 |
What Moves the Bar
A cheaper rate helps most: at 5.5% the $400,000 payment falls to about $2,262, cutting required income to roughly $97,000. Heavy debt raises it — $1,000 a month of car or student loans pushes the needed income to about $116,000 because the 36% back-end cap replaces the 28% cap. Test your own numbers above.
Frequently Asked Questions
Can I afford a $400k house on $80,000?
Not comfortably under the 28/36 rule — the full payment would be about 37% of your gross income. You would need a larger down payment, a lower rate, or a cheaper home.
How much cash do I need upfront for a $400,000 house?
About $80,000 for 20% down, plus closing costs of 2-5% ($8,000-$20,000) — roughly $88,000 to $100,000 total.
What if I put less than 20% down?
The loan grows and PMI of roughly 0.5-1.5% of the balance per year is added, so required income rises. At 10% down, plan on needing around $125,000 to $138,000 once PMI is included.
Does the 28% rule include utilities?
No. It covers principal, interest, taxes, and insurance. Budget utilities and maintenance separately — about 1% of the home's value per year for upkeep.