How Much House Can I Afford Making $150,000 a Year?


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With a $150,000 salary, you could afford a home priced around $415,000-$430,000, assuming you have $20,000 saved up for a down payment and are carrying some monthly debt already, such as a car payment or student loan. This also assumes an interest rate of 7%.

As you can see, your homebuying budget depends on more than just your salary, including your personal financial situation, the mortgage rate you qualify for, and the loan type. Here’s a closer look at the key considerations that impact home affordability, plus guidance on calculating how much house you can afford.

What Kind of House Can I Afford With $150K a Year?

You may have heard the age-old adage: location, location, location. The type of house you can afford on a $150,000 salary will depend on where you’re looking to buy. Besides differences in cost of living by state, prices can also vary at the neighborhood level.

Your personal finances — not just income — matter, too. Lenders will assess your credit score, debt, assets, and ability to make a down payment to determine what kind of home mortgage loan you qualify for, which helps determine your homebuying budget.

Understanding Debt-to-Income Ratio

Your debt-to-income (DTI) ratio represents the percentage of your gross income that goes toward debt payments. It’s calculated by dividing all your monthly debts — such as student loans and credit card debt — by your gross monthly income.

Lenders consider a borrower’s DTI ratio to determine whether they qualify for a home loan and at what interest rate. A DTI ratio of 36% or less is recommended for homeowners, though the maximum DTI ratio varies from lender to lender and between mortgage types.

If earning $150,000 a year, your gross monthly income is $12,500. To have a DTI ratio of 36% or less, your total debts, including the mortgage, would need to be at or below $4,500.

Some lenders may assess both your front-end and back-end DTI ratios, using what is known as the 28/36 rule. In this scenario, lenders usually look for housing costs to top out at 28%. This comes out to $3,500 in monthly housing costs on a $150,000 salary.

Meanwhile, back-end DTI covers all recurring debt payments. Lenders typically prefer a back-end ratio of 36% or less.

How to Factor in Your Down Payment

The required down payment amount depends on the type of home loan. But how much you can put toward a down payment impacts how much house you can afford. The more you can put down upfront, the less you’ll need to borrow, which means lower monthly payments and less interest paid over time. Having a larger amount saved for a down payment could also increase your housebuying budget.

That being said, a down payment shouldn’t wipe out your savings. It’s important to account for home repairs and ongoing housing costs when deciding how much money to put down.

Factors That Affect Home Affordability

There are several factors that affect home affordability in addition to DTI ratio and down payment. Lenders will consider a borrower’s credit score to determine their ability to repay a mortgage loan. The higher your credit score, the better your chance of qualifying for a lower interest rate and favorable loan terms.

How you plan to finance your home matters, too. The minimum credit score, down payment requirement, and DTI ratio all vary by home loan type.

Besides your personal finances, prevailing mortgage rates have a major effect on home affordability. Higher interest rates increase monthly payments and the overall cost of borrowing. The National Association of Realtors® estimates that mortgage interest rates will average 6.3% in 2024. This represents a significant rate drop from 2023 when interest rates exceeded 7% for the majority of the year.

Home Affordability Examples

Here’s a look at a couple home affordability examples that show how the amount of debt you carry could affect your home affordability budget.

As noted above, according to the 28/36 rule, you can afford a maximum monthly mortgage payment of up to $3,500 and total monthly debt payments of up to $4,500 if earning $150,000 a year.

A borrower with $1,000 in monthly debt and $50,000 saved toward a down payment could afford a $500,000 house, or a monthly payment of $3,391, assuming a 5% interest rate and average property taxes and insurance costs.

Meanwhile, a borrower with $2,000 in debt could only afford a monthly mortgage payment of $2,500. In this scenario, a borrower could afford a house of nearly $400,000 with a $50,000 down payment and holding other variables constant.

How to Afford More House With Down Payment Assistance

According to the National Association of Realtors®, the average down payment in 2023 was 8% for first-time homebuyers and 19% for repeat buyers. This can translate to a hefty sum, especially in more expensive housing markets. If you’re facing challenges coming up with a down payment, you’re not alone. Buyers can consider down payment assistance programs to help get a mortgage.

Down payment assistance programs are offered by the federal government, state and local government, and nonprofit organizations. Assistance is available in the form of grants, low-interest loans, or forgivable loans to help buyers make a down payment.

This assistance typically comes with eligibility requirements for the homebuyer and property. For example, applicants may need to meet household income limits or be a first-time homebuyer to qualify. Assistance programs are usually intended for primary residences, and buyers can be required to live in the home for a minimum timeframe.

How to Calculate How Much House You Can Afford

Still wondering, “I make $150,000 a year, how much house can I afford?” You’ll need your total monthly debt, estimated down payment, and interest rate to calculate how much house you can afford.

Rather than crunching the numbers yourself with the 28/36 rule, use a home affordability calculator or mortgage calculator to easily experiment with different scenarios. Prospective homebuyers can also get preapproved for a home loan to get an idea of how much they can afford. Getting preapproved also shows sellers that you’re a serious buyer and provides some assurance that your financing won’t fall through.

How Your Monthly Payment Affects Your Price Range

Lenders consider your ability to afford monthly mortgage payments when determining how much you qualify to borrow. Mortgage payments consist of four components: principal, interest, taxes, and insurance.

The principal refers to the loan balance, while the interest is the amount (expressed as a percentage) that’s charged on the principal by the lender for issuing the loan. Real estate and property taxes can be lumped into monthly mortgage payments. These costs vary considerably by the property’s location and assessed value, ultimately impacting your home price range.

Home insurance that protects the property from fire, theft, floods, or other disasters is sometimes included in a monthly payment. And if you put less than 20% down on a house, you’ll have to pay private mortgage insurance (PMI), which increases your monthly payment. However, it’s possible to get out of PMI down the line when you hit 20% equity or with a mortgage refinance.

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Types of Home Loans Available to $150K Households

Households making $150,000 a year have multiple financing options. Qualifying for different types of mortgage loans depends on credit score, down payment, and other borrower characteristics. Here are some common home loan options for $150,000 households to consider:

  • Conventional loans: The most common type of mortgage, conventional home loans usually require a 620 credit score and may offer down payments as low as 3%.
  • FHA loans: This loan backed by the Federal Housing Administration offers competitive interest rates and a down payment of 3.5% for qualified first-time buyers with a credit score of at least 580.
  • United States Department of Agriculture loans: There’s typically no down payment or credit requirements, but borrowers must meet income eligibility and a property must be in a USDA-designated rural area.
  • 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 requirement.

The Takeaway

If you make $150,000, how much house you can afford depends on several factors, including your DTI ratio, credit score, loan type, savings for a down payment, and location. After figuring out your personal homebuying budget, it’s time to start shopping for a home loan.

This article originally appeared on and was syndicated by

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*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.

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How much is my house worth?

How much is my house worth?

Your house is much more than a home—it’s likely one of the biggest purchases you’ll ever make, with a value that makes up a significant proportion of most people’s net worth. As such, you’ve probably wondered from time to time what your home is worth.

Determining the answer is not as simple as referring back to your sales agreement or mortgage papers. What you paid for your house when you purchased it merely reflects what your house was worth to you—and the real estate market—at a specific point in time.

In reality, housing values are dynamic and they fluctuate based on a number of factors. Some things, such as keeping your house in good repair, are within your control. Other external influences, such as the market, mortgage rates and other considerations, can also affect the value of your home.

Related: How
Much Does it Cost to Remodel a House?


There are a number of ways you can determine the estimated value of your house. The easiest, and fastest, way to get started is by using an online home valuation calculator. 

These tools provide a general ballpark estimate of the value of your home based on your address. Such estimates are typically based on publicly available information including average home sales in your area, property tax assessment information, market trends and other data.

Once you have a rough estimate of your property’s worth, you can use other cues, such as sales and mortgage trends, to get a sense of whether your property value is likely to increase, decrease or remain stable.


A professional appraiser or real estate agent can also help you get a more precise estimate of what your house is worth. An appraiser will consider both the local housing market and the unique characteristics of your property.

Real estate agents, meanwhile, will typically first perform a comparative market analysis (also called a comp or CMA). This is an estimate based on actual data from recently sold homes that are most similar to yours.

If you are looking to sell, you may want to consider getting a comparative marketing analysis from several different real estate agents to help you assess their knowledge of the local market.

But understanding the various criteria real estate agents use to determine listing prices can also help you to get an accurate picture of what your house is worth.

Every house is unique, but the factors used to determine their value are fairly consistent.

There’s a good reason why “location, location, location” is one of the most popular mantras in real estate. The same home, in the exact same condition, will fetch different prices depending on where it is. 

Proximity to schools, shopping, public transportation, and other resources and infrastructure can increase the desirability of a neighborhood and thus, the value of the home. Safety considerations, such as crime rates, sidewalks and traffic signals can also impact house values.


Fixed attributes such as the size of your lot, square footage and age of your home, number of bedrooms and bathrooms, parking or built-in heating and cooling systems are among the criteria buyers will typically consider (and agents may factor in while developing a comparative marketing analysis).


Well-maintained houses with high curb appeal can typically fetch better prices than run-down fixer uppers. As such, the most controllable aspect of your home’s value is its condition. To evaluate the condition of your home, take stock of any required repairs and updates, both major and superficial, as well as upgrades such as premium kitchen appliances, flooring and any renovations you may have performed.


There are additional factors outside of your control that will affect the value of your home, though these may be less significant if you are not imminently considering selling.

For example, the state of the economy and mortgage rates may dictate others’ appetite for real estate purchases, as well as how much they are willing to spend. Seasonal fluctuations such as holidays and weather can also affect home purchasing patterns.


Though there are some factors that may be out of your control, there are things you can do to increase the value of your home. If you are considering selling soon, staging your house or making small improvements, such as tidying your garden, can go a long way towards appealing to buyers — without a big financial investment.

But if you are considering investing in renovations and upgrades, it is helpful to know which will deliver the greatest returns. An online calculator can compare different projects to determine how various home improvements might affect the resale value of your home.


If you are considering selling your house, “How much is my home worth?” is likely one of the first things you’ll wonder. But even if a move isn’t something you are considering right now, there are other reasons why it might be important to know the actual value of your home.

For those considering relocating, getting a reliable estimate of the value of your house will inform how much you can afford to spend on your next house.

As taxes, real estate agent commissions and some other fees will be based on the actual sale price of your house, this valuation will also help you to estimate some of your moving costs.


There may be other reasons for knowing how much your house is worth even if you’re happy where you are. For starters, as one of the greatest assets in many people’s financial portfolios, your home’s value can be helpful for long-term money planning, including retirement and estate planning.

If these things seem a long way off, there are immediate benefits to being informed about your home’s worth, too.

Your property tax bill is based on the market value of your house and may change from year to year, based on your municipality’s estimate of its worth as determined by a government assessor.

A reliable estimate of the value of your home can help you to identify discrepancies in the assessed value. If you believe there is an error, you can file an appeal in attempt to get your property tax bill reduced.

Having an accurate estimate of the value of your home is also important for obtaining appropriate insurance coverage. If your estimate is too low relative to the actual value of your home, you run the risk of being underinsured in the event of a claim. Too high, and you’re paying for coverage you don’t need.

Your home’s value can also help you to access money to pay for home improvements, a financial emergency, or other needs that may arise. If the current value of your home is more than it was at the time you purchased it, you may be able to tap into that increased value with a cash-out refinance.


Even if you’re not looking to sell, adding value to your home may result in savings in the near term.

The amount of equity you own in your home can be determined by subtracting what you owe on your house (or your mortgage principal) from the current total value of your home—so if your property value has increased, you have more equity than when you purchased your home.

Typically, buyers who purchase a home with less than 20% down are required to pay for private mortgage insurance (PMI)—a fee that is based on a percentage of your total mortgage.

If the increase in your property value brings your equity over the 20% threshold, you can ask your mortgage loan servicer to cancel the PMI.

Another option may be able to refinance your mortgage without that fee. And even if you aren’t paying for PMI, an increase in property value can improve your loan-to-value ratio (LTV), giving you access to better interest rates.

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