How this calculator works
The full monthly housing payment is divided by the housing ratio limit, and housing plus other debts is divided by the total DTI limit. The higher of the two results, times 12, is the income you need, and the calculator tells you which ratio is the limit.
Worked example
With the example values below: Income needed, $119,000 / yr (to afford $2,779 a month). Change any number above to run your own.
What you enter
| Input | Example |
|---|---|
| Home price | $450,000 |
| Down payment | $90,000 |
| Interest rateExample rate; use your quote | 6.25% |
| Loan term | 30 years |
| Taxes & insurance | |
| Property tax rateAnnual, as % of home value | 1.1% |
| Homeowners insurance / yr | $1,800 |
| Other monthly debts | $400 |
| Housing ratio limit | 28% |
| Total DTI limit | 36% |
How lenders work out the income you need
Lenders check two debt-to-income ratios. The housing ratio divides your full monthly housing payment (principal, interest, taxes, insurance, PMI and HOA dues) by gross monthly income; a common limit is 28%. The total ratio adds your other monthly debts; common limits are 36% to 43%.
To find the income you need, the calculator divides the housing payment by the housing limit, divides housing plus other debts by the total limit, and uses whichever result is higher. It also tells you which limit is binding.
Income needed for common home prices
Assuming 10% down, a 6.5% 30-year rate, 1.1% property tax, insurance at 0.4% of the price a year and PMI at 0.5% of the loan, here's the approximate gross income needed under the 28% housing guideline with no other debts:
| Home price | Approx. monthly payment | Income needed |
|---|---|---|
| $250,000 | $1,830 | $78,000 |
| $350,000 | $2,560 | $110,000 |
| $450,000 | $3,290 | $141,000 |
| $600,000 | $4,390 | $188,000 |
What counts as income
Lenders use stable, documented income they expect to continue: base salary or wages, and usually overtime, bonuses or commissions with a two-year history. Self-employment income is based on the last two years of tax returns, after business deductions. Social Security, pensions, alimony and rental income can also count with documentation.
If your income is close to the requirement, a larger down payment, paying off a car loan or adding a co-borrower can close the gap. The how much can I borrow calculator runs the same math from your income to a loan amount.
Beyond the lender's minimum
Meeting the lender's ratios means you can get the loan, not that the payment will feel comfortable. Check it against your take-home pay and your current spending, and include maintenance and repairs; the cost of owning a home calculator adds them up.
Frequently asked questions
How much income do I need for a $300,000 house?
About $94,000 a year under the 28% housing guideline, assuming 10% down, a 6.5% 30-year rate, 1.1% property tax, typical insurance and PMI, for a payment near $2,190 a month. With other monthly debts, the 36% total-debt limit may require more.
What is the 28% rule for mortgages?
A guideline that your total monthly housing payment shouldn't exceed 28% of your gross monthly income. On $7,500 a month, that's $2,100 for principal, interest, taxes, insurance and any PMI or HOA dues.
How much house can I afford on $100,000 a year?
About $330,000 to $340,000 with roughly 10% down and no other debts, at a 6.25% to 6.5% rate. The how much house can I afford calculator lets you change every assumption.
Does bonus or overtime income count for a mortgage?
Usually, if you have a two-year history of receiving it and your employer expects it to continue. Lenders typically average it over the past two years.
Do lenders count my spouse's income?
Only if your spouse is on the loan as a co-borrower. Then their income and their debts are both included in the debt-to-income calculation.
Grow what this calculator projects.
TruthSayer AI sends quantitative stock signals across valuations, earnings and dark-pool activity, each one traded in its own funded account first.
Estimates for planning only, not financial, tax or legal advice. Tax tools use 2026 federal figures (brackets, $16,100 / $32,200 standard deduction, $19,000 gift exclusion, $15M lifetime exemption). Rates shown as defaults are examples; replace them with quotes you actually receive.