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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. However, depending on where you want to live, interest rates, and how much debt you’re carrying, that figure could change significantly.

This article looks at the factors you should consider when deciding how much house you can afford. Following this guide is the best way to get a realistic idea of how much house you really can get on a salary of $60,000.

What Kind of House Can I Afford With $60K a Year?

A salary of $60,000 is below the national median income of $74,580, according to Census data. While you will probably qualify for a mortgage in most states with that salary, it won’t buy you much of a home in areas with a high cost of living, such as New York or California.

How much house you can afford on $60,000 a year depends on how affordable your city is, your debt-to-income ratio (DTI), interest rates, and how much you can save for a down payment.


💡 Quick Tip: Buying a home shouldn’t be aggravating. SoFi’s online mortgage application is quick and simple, with dedicated Mortgage Loan Officers to guide you through the process.

Your Debt-to-Income Ratio

Another rule of thumb is the 28/36 rule. This rule holds that you should spend no more than 28 percent of your gross income on overall housing costs (including mortgage, taxes, and insurance) and no more than 36 percent on all debt combined (mortgage, credit card bills, car payment, student loan, etc.).

So, if you earn $60,000, your housing costs should be less than $16,800, or $1,400 a month, and your debt and housing costs should not exceed $21,600, or $1,800 a month. This calculation reflects your DTI ratio. To get a sense of how much you might be able to borrow and still walk away under your 28/36 maximums, try putting your numbers into a home affordability calculator.

Lenders look at how much debt you have when they determine if you qualify for a mortgage. From the lender’s point of view, the less you are paying each month in debt, the less likely you are to default on your mortgage loan, and the better the loan terms they can extend. A higher ratio means you are using more of your income to cover existing debt.

Your Down Payment

How much do you have saved up for a down payment? Your down payment directly affects how much you will have to pay each month in principal and interest. According to the National Association of Realtors®, the average first-time buyer pays about 6 percent of the home price for their down payment, while repeat buyers put down 17 percent. The more you put down, the lower your monthly housing cost. Whatever your salary, you can borrow more and buy a more costly house if your monthly payments are less.

Home Affordability

How affordability is a measure of how affordable homes are in a certain area. Some areas have a higher cost of living, higher average house prices, and higher property taxes. For example, New Jersey has high property taxes, but South Carolina and Mississippi tend to have low property taxes. It also costs more to buy necessities in New Jersey than South Carolina or Mississippi.

Your credit score is another factor to consider in the home affordability equation. A higher credit score will mean you should qualify for a lower interest rate with a lender and better loan terms. Better loan terms mean (you guessed it) lower monthly payments, which might give you the bandwidth to borrow a little more.

How to Afford More House with Down Payment Assistance

Federal, state, and local government, private entities, and charitable organizations offer down payment assistance in the form of low-rate loans, cash grants, tax credits, and interest rate reductions. Some of the programs are offered to specific professionals, such as nurses or teachers, first-time homebuyers, and some programs are neighborhood-based.

Property tax abatement and federal tax credits to first-time buyers are applied automatically. However, the U.S. Department of Housing and Urban Development (HUD) maintains a semi-complete list of programs listed by state, county, and city. Note that applying for down payment assistance can add weeks or months to the homebuying process.

Here are typical down payments for various types of mortgages. Learn more by visiting a home loan help center.

•   Conventional mortgages require a down payment that can be as low as 3%.

•   FHA loans backed by the Federal Housing Administration require 3.5% down.

•   VA mortgages from the U.S. Department of Veterans Affairs require 0% down.

•   United States Department of Agriculture (USDA) loans offer loans to people in rural areas with no down payment.

Home Affordability Examples

Below are some hypothetical examples for buyers who make $60,000 a year with different savings for a down payment and monthly debt payments. The interest rate is 7%, and property tax rates are assumed to be average.

The Saver with a Down Payment

Gross annual income: $60,000
Amount of money for a down payment: $12,000
Monthly debt: $250
Property taxes: 1.12%

SoFi estimates that you can afford a home that costs $120,000. Bear in mind that you can expect to pay closing costs of around $4,800 in addition to the monthly charges below. Here is a breakdown of the costs:

Home Loan: $108,000
Down Payment: $12,000
Total Monthly Payments $953

•   Principal and Interest: $719

•   Property Taxes: $113

•   Private Mortgage Insurance: $90

•   Homeowners Insurance: $31

The Buyer with A Bigger Down Payment and Some Debt

Gross annual income: $60,000
Amount of money for a down payment: $25,000
Monthly debt: $300
Property taxes: 1.12%

In this scenario, you might comfortably afford a home that costs $250,000 (again, closing costs would come into play). Here is a breakdown:

Home Loan: $225,000
Down Payment: $25,000
Total Monthly Payments $1,615

•   Principal and Interest: $1,127

•   Property Taxes: $234

•   Private Mortgage Insurance: $66

•   Homeowners Insurance: $71


💡 Quick Tip: Don’t have a lot of cash on hand for a down payment? The minimum down payment for an FHA mortgage loan is as low as 3.5%.

How to Calculate How Much House You Can Afford

Keeping a budget to track your monthly expenditures is the first step to calculating how much house you can afford. Once you know how much you are spending each month on food, entertainment, your car, clothing, and utilities, you can add up these expenses and subtract them from your monthly income (don’t include rent here). What you have left is the amount you can afford to spend on housing expenses.

If you spend no more than 25 to 28% of your monthly income on housing, and your monthly income is $5,000, you can afford to spend $1,400 on mortgage and housing expenses.

You can also try putting different numbers into a mortgage calculator to see how different combinations of down payment amount or home cost affect monthly payments.

How Your Monthly Payment Affects Your Price Range

Your monthly payment is made up of principal and interest. If you can afford to pay more each month, you can afford a bigger house. That is, provided you don’t have too much debt. However, if you can, coming up with a bigger down payment in the beginning will likely reduce the interest rate offered by your lender and your monthly payments. You should feel comfortable with the cost of your monthly housing expenses going into a home purchase, but if your earnings or credit score increase notably after a few years, you can always look at a mortgage refinance.


💡 Quick Tip: Backed by the Federal Housing Administration (FHA), FHA loans provide those with a fair credit score the opportunity to buy a home. They’re a great option for first-time homebuyers.

Types of Home Loans Available to $60K Households

Conventional loans, FHA loans, USDA, and VA loans are the common loans available.

•   Conventional loans. These are the most common. They typically require a credit score of at least 620. Some will allow a down payment as low as 3 percent, but that will mean your monthly payments will be higher because you will have to borrow more.

•   FHA loans. FHA loans provide a percentage of the cost of a home depending on the buyer’s credit score. Home buyers with a credit score over 580 can borrow up to 96.5 percent of a home’s value. Home buyers whose credit scores are between 500 to 579 can qualify for a loan as long as they have a 10 percent down payment.

•   USDA: These loans serve borrowers earning below a certain income level who want to buy homes in designated rural areas.

•   VA: VA loans require no down payment and are offered to qualified military service members, veterans, and their spouses.

The Takeaway

The 28/36 rule holds that if you earn $60k and don’t pay too much to cover your debt each month, you can afford housing expenses of $1,400 a month. Another rule of thumb suggests you could afford a home worth $180,000, or three times your salary.

When calculating how much a lender might extend to you depends on your debt-to-income ratio, the cost of living and property taxes in the area you want to live, interest rates, and how much you have saved for a down payment.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

Is $60K a good salary for a single person?

A salary of $60,000 is below the national median income which was $74,580 in 2022, according to Census data, the national median income was. On this income, you might struggle to buy a home in areas with a high cost of living unless you have a large down payment.

What is a comfortable income for a single person?

Average monthly expenses for one person in 2022 totaled $3,693, or $44,312 annually, according to the U.S. Bureau of Labor, so earning more than this amount would be a comfortable income as long as the cost of living where you live isn’t significantly above average, which varies widely among the states. But what any individual considers comfortable will depend on their spending habits.

What is a liveable wage in 2023?

A liveable wage, according to the Massachusetts Institute of Technology, was $104,07 per year before taxes in 2022. This for a family of four or two working adults with two children.

What salary is considered rich for a single person?

An income of $540,009 per year puts a person in the top 1% earnings category, according to the most recent IRS data.

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Photo credit: iStock/Sundry Photography

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

^¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
^†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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One rule of thumb is that the cost of your home should not exceed three times your income. On a salary of $70k, that would be $210,000. This is only one way to estimate your budget, however, and it assumes that you don’t have a lot of other debts. The truth is that how much house you can afford depends on many factors, so let’s take a look at them.

If I Make $70,000 a Year, How Much House Can I Afford?

“How much house can I afford if I make $70,000 a year” is a question with no single right answer. A second popular guideline for knowing how much house your budget can bear is the 28/36 rule, which stipulates spending no more than 28 percent of your salary on overall housing costs, and no more than 36 percent on all of your debts, including housing costs.

If you follow the 28/36 rule, your housing costs should be less than $1,633 a month, and your debt and housing costs should not exceed $2,100 a month. But how much house that will buy depends on where you live and your existing debt level.


💡 Quick Tip: When house hunting, don’t forget to lock in your home mortgage loan rate so there are no surprises if your offer is accepted.

Your Debt-to-Income Ratio

Lenders look at various things when they qualify you for a loan, but your debt-to-income (DTI) ratio is definitely one of them. This ratio is the amount of income you have relative to the amount of payments you make each month to cover your debt.

A higher ratio means you are using more of your income to cover existing debt, which means, from the lender’s point of view, you will have less cash to pay for your home loan each month. Therefore, a lower debt-to-income ratio, under 36 percent ideally, is better and will likely give you better mortgage terms from a lender.

Your Down Payment

Conventional lenders require a down payment on a home. The amount depends on lender requirements and the borrower’s financial situation. According to the National Association of Realtors®, the average first-time buyer pays about 8% while repeat buyers put down 19%.

The higher your down payment, the lower your monthly housing costs. The interest rate will also affect your monthly costs. You can use a mortgage calculator to see how different down payments affect your loan.

Home Affordability

Depending on the location, homes can be more affordable or less affordable. As noted above, the local housing market, the cost of living, your income, and current interest are all factors affecting home affordability. Remember that if your interest rate feels high, you can consider a mortgage refinance if rates drop and you plan to stay in the home long-term.

House Prices

House prices vary. You might be selling a house where the prices are low and wanting to buy a home where prices are high. If that’s the case, you might have to settle for a much smaller home.

Cost of Living

The cost of living varies depending on where you live. In areas where the cost of living is cheaper – the southern states tend to have lower property taxes and a lower cost of living – you will spend less on necessities and have more money to put towards your monthly home expenses. If you are moving from New York to South Carolina, your household expenses will be much lower in South Carolina, so you might be able to afford a more costly house.

Property Taxes

Your property taxes are based on the assessed value of a property. They vary widely and significantly increase the costs of homeownership in areas where they are high.

How to Afford More House With Down Payment Assistance

The hardest part of buying a home is, arguably, coming up with the down payment. Some state and local governments offer down payment assistance programs to help with the down payment and closing costs for qualified borrowers. Usually for first-time homebuyers, these programs are often low-interest loans or grants, or they might help with closing costs.

If you have a $200,000 home mortgage loan, the closing cost could be around 5 percent, or $4,000. A down payment assistance program might help with those costs, allowing you to use more of your savings for the down payment. You can apply for assistance using a formal application to your state or local government.

Home Affordability Examples

Below are some hypothetical examples for buyers who make $70,000 a year with different savings for a down payment and with various levels of debt. The interest rates are assumed to be 7%, and property tax rates are assumed to be average (1.12%). A buyer in these scenarios would need an additional $4,000 to $6,000 on hand for closing costs.

Example #1: Saver with a Down Payment

Gross annual income: $70,000

Down payment: $21,000

Monthly debt: $250

Home budget: $210,000
Monthly mortgage payment: $1,667

Total Monthly Payments $1,667

•   Principal and Interest: $1,257

•   Property Taxes: $197

•   Private Mortgage Insurance: $158

•   Homeowners Insurance: $55

Example #2: Saver with A Down Payment … and Debt

Gross annual income: $70,000

Savings for down payment and closing: $12,000

Monthly debt: $500

Home budget: $120,000

Total Monthly Payments $953

•   Principal and Interest: $719

•   Property Taxes: $113

•   Private Mortgage Insurance: $90

•   Homeowners Insurance: $31

Using a home affordability calculator, you can plug in different amounts for down payments to get a sense of what you can afford.

How to Calculate How Much House You Can Afford

Rather than relying on a rule of thumb, first keep a budget to track your monthly expenditures, not including any rent. Your expenses should include credit card debt, student loans, other mortgages, etc. Next, decide how much you can put down as a down payment.

Plug your gross annual salary and other numbers into an affordability calculator along with the average interest rate and the property taxes in the area that you want to live. This should give you a general idea of how much home you can afford.

How Your Monthly Payment Affects Your Price Range

Your monthly payment is made up of principal and interest. The interest is determined by the lender, and the higher the rate, the higher your monthly payment. If your down payment is large and you get a good interest rate because you have good credit, you might be able to afford a more expensive house. But you still have to save the down payment.

Types of Home Loans Available to $70K Households

Conventional, FHA, USDA, and VA are the most common home loan options available:

•   Conventional These loans are the most common. They typically require a credit score of at least 620. Some lenders will require a down payment as low as 3 percent, but that will mean your monthly payments will be higher because you will borrow more.

•   FHA Federal Housing Administration loans are a good option if you have a credit score between 500 and 579. These loans require a 10 percent down payment, but if you have a score of 580 or higher, 3.5 percent is accepted.

•   USDA United States Department of Agriculture loans serve low-income borrowers in designated rural areas and require no down payment.

•   VA U.S. Department of Veterans Affairs loans offer a no-down-payment option.

💡 Quick Tip: Active duty service members who have served for at least 90 consecutive days are eligible for a VA loan. But so are many veterans, surviving spouses, and National Guard and Reserves members. It’s worth exploring with an online VA loan application because the low interest rates and other advantages of this loan can’t be beat.†

The Takeaway

Your salary is just one factor determining how much house you can afford. You also have to consider your monthly expenses, how much debt you have, the property taxes in the area where you want to live, current interest rates, and how much you can afford as a down payment. The good news is that if you earn $70,000, most estimates show that you can afford to spend around $2,100 a month on housing expenses so a home should be within reach.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

Is $70K a good salary for a single person?

A salary of $70,000 is significantly higher than the national median income for a single person in 2022, which was $51,930 for men and $40,200 for women, according to Census data. It’s a good salary, but it does make buying a home harder when the interest rates are high, particularly if you want to live in an area with a high cost of living.

What is a comfortable income for a single person?

A comfortable income for a single person is one that provides a good standard of living where the person lives. The cost of living can vary significantly between and within states. The Massachusetts Institute of Technology Living Wage Calculator is a good place to look at what equates to a livable wage in your specific county.

What is a liveable wage in 2023?

According to the Massachusetts Institute of Technology, the living wage in the United States was $104,07 per year before taxes per year in 2022 for a family of four (two working adults with two children).

What salary is considered rich for a single person?

According to Internal Revenue Service data, an income of $540,009 per year puts a person in the top 1% earnings category.

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Photo credit: iStock/svetikd

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

^¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
^†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.

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Making $160,000 a year could put you on track to purchase a home for around $480,000. But how much you earn is just one factor lenders look at when determining how much you can borrow for a home mortgage loan. Let’s take a closer look at calculating home affordability and other key considerations to answer your question, “If I make $160,000 a year, how much house can I afford?”

What Kind of House Can I Afford With $160K a Year?

The type of house you can afford is determined in part by location. Your money is likely to go further in a rural area than an urban center, for instance. It’s important to consider the cost of living by state, local property taxes, and insurance requirements when browsing options. Whether you’re looking for a condo, townhouse, or a single-family home will affect how much house you get as well.

What kind of home mortgage loan you can secure will also depend on your personal financial situation — not just income alone.

Recommended: Best Affordable Places to Live by State

Understanding Debt-to-Income Ratio

Lenders consider your existing debt to determine your ability to pay back a home loan. Typically, this is performed by calculating a borrower’s debt-to-income (DTI) ratio, or the percentage of gross income that goes toward debt payments.

To calculate your DTI ratio, simply divide all your monthly debts (student loans, auto loans, etc.) by your gross monthly income. Generally, lenders view a DTI ratio of 36% or less as favorable. However, buyers may qualify for certain loans with a higher DTI.

If you make $160,000 a year, your gross monthly income is $13,333. Thus, you’ll need to keep monthly debt payments below $4,800 to maintain a DTI ratio of 36% or less.

Lenders often calculate DTI using the 28/36 rule, which recommends that borrowers limit housing costs to 28% of gross monthly income and all debts to 36%. On a $160,000 salary, the 28/36 rule comes out to $3,733 for housing costs and $4,800 for total monthly debt payments.

💡 Quick Tip: Not to be confused with prequalification, preapproval involves a longer application, documentation, and hard credit pulls. Ideally, you want to keep your applications for preapproval to within the same 14- to 45-day period, since many hard credit pulls outside the given time period can adversely affect your credit score, which in turn affects the mortgage terms you’ll be offered.

How to Factor in Your Down Payment

The lender and loan type will determine how much you need to put toward a down payment. But putting more money down upfront can expand your homebuying budget. A larger down payment also reduces the amount you need to borrow. This translates to lower monthly payments and less interest paid over the life of the loan.

When figuring out how much you can afford for a down payment, it’s important to reserve funds for closing costs, plus any necessary home repairs.

Recommended: How to Lower Down Payment Requirements in 2024

Factors That Affect Home Affordability

There are multiple factors besides income and down payment amount that affect home affordability. When assessing your ability to repay a mortgage, lenders will look at your credit score alongside your DTI ratio. Generally, higher credit scores translate to a lower interest rate, since there’s less risk to the lender. The minimum credit score varies between the different types of mortgage loans.

Mortgage interest rates are only determined in part by a borrower’s credit history. Economic conditions impact prevailing mortgage rates across the housing market. For 2024, the National Association of Realtors® estimates that mortgage interest rates will average 6.3%.

Recommended: Tips to Qualify for a Mortgage

How to Afford More House With Down Payment Assistance

Saving up money for a down payment can be a barrier to homeownership. Buyers struggling to make a down payment can explore assistance programs to make home buying a reality. Down payment assistance comes in several forms, including grants, low-interest loans, and forgivable loans. Down payment assistance programs are offered by the federal government, state and local government, and nonprofit organizations.

Note that assistance typically comes with eligibility and property requirements. Often, assistance is reserved for low-to-moderate income buyers or first-time homebuyers. To be eligible, properties typically must be primary residences, and buyers may need to occupy the home for a set period of time.

Home Affordability Examples

Here are some home affordability examples for borrowers with different DTI ratios and down payments.

According to the 28/36 rule, a borrower earning $160,000 a year can afford a maximum monthly mortgage payment of up to $3,733 and total monthly debt payments of up to $4,800. Using this guideline, if a borrower’s monthly debt is $800 and they have set aside $30,000 for a down payment, a home priced around $483,000 could be in the budget (assuming 7% interest and average property taxes).

Some homebuyers may prefer the flexibility of the 35/45 rule, which would recommend a maximum of $4,667 towards housing costs and $6,000 to pay for all monthly debt. If a lender is flexible as well, the home budget on a $160,000 salary in this scenario (assuming debt and down payment remain constant) would be $589,000.

💡 Quick Tip: Lowering your monthly payments with a mortgage refinance from SoFi can help you find money to pay down other debt, build your rainy-day fund, or put more into your 401(k).

How to Calculate How Much House You Can Afford

To answer, “I make $160,000 a year, how much house can I afford?”, you’ll need to gather some information to crunch the numbers. Namely, you’ll need to tally up your total debt and available savings for a down payment. You’ll also need to estimate your interest rate, as a slight change in interest rate can have a significant impact on monthly payment.

Rather than doing the math yourself with the 28/36 or 35/45 rules, using a home affordability calculator makes it easy to see how much house you can afford in different scenarios.

How Your Monthly Payment Affects Your Price Range

Borrowers repay their mortgage via monthly payments for a fixed term — usually 15 or 30 years. The monthly payment amount is used to calculate your DTI ratio, and ultimately, how much house you can afford.

Mortgage payments consist of four components: principal, interest, taxes, and insurance. The loan principal (the amount you borrow) and the interest paid on the loan can be estimated with a mortgage calculator.

Meanwhile, the property taxes and insurance costs can range considerably between homes based on their location and assessed value. For instance, buying a home in a flood zone may require flood insurance.

If you put less than 20% down on a house, you’ll need to pay private mortgage insurance (PMI), which increases your monthly payment. If you want to see how different home prices, down payments, and other variables affect your mortgage, try using a mortgage calculator.

Types of Home Loans Available to $160K Households

Buyers making $160,000 a year have several home loan options to choose from. The requirements for credit score, down payment, and DTI ratio vary by loan type. Here are some to consider:

•   Conventional loans The most common loan type, these loans usually require a 620 credit score and may offer down payments as low as 3%.

•   FHA loans Backed by the Federal Housing Administration, they offer flexible borrower requirements, including a down payment of 3.5% with a minimum credit score of 580.

•   USDA loans Borrowers in United States Department of Agriculture-designated rural areas can get a home loan with no down payment required if they meet income eligibility.

•   VA loans Active-duty service members, veterans, reservists, and surviving spouses can get a low-interest loan from the U.S. Department of Veterans Affairs with no down payment required.

To learn more about mortgage options and the homebuying process, check out a home loan help center.

The Takeaway

If you earn $160,000 a year, how much house you can afford depends on your personal financial situation and where you’re looking to buy. Besides your income, you’ll need to know your estimated down payment and total debt to calculate home affordability. Once you have a good sense of your budget, it’s time to start shopping for a house — and a home loan.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

Is $160K a good salary for a single person?

A $160,000 salary for a single person is well over double the national average wage in 2022 of $63,795.

What is a comfortable income for a single person?

A comfortable income for a single person should exceed the local cost of living to allow sufficient budget for savings and discretionary spending.

What is a liveable wage in 2024?

For Americans in most states, a livable wage is between $15 and $20 an hour. However, the cost of living can vary considerably by location, and in cities in California, New Jersey, New York, and Virginia, a livable wage is considerably higher.

What salary is considered rich for a single person?

A single person with a salary over $652,657 would be considered in the top 1% of earners in the U.S.

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Photo credit: iStock/Jacob Wackerhausen

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

^¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
^†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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