How much house can I afford on a $120k salary?
About $443,983, using a $2,800 monthly housing budget (28% of $10,000 gross monthly income), 20% down, no other debts and a 30-year loan at an illustrative 6.5%. That is 3.70 times the salary.
Each half point of rate is worth roughly $18,566 of purchase price at this income. At an illustrative 5.5% the maximum is about $483,399; at 7.5% it is about $409,134.
Illustrative rate, not a current offer. Property tax and insurance are placeholders; replace them with local figures in the calculator.
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Monthly budget at 28%
A $120k salary is $10,000 a month before tax. 28% of that, $2,800, is the housing budget; with no other debts the 36% limit ($3,600) is higher, so 28% sets the price.
| Principal and interest ($355,187 loan) | $2,245 |
|---|---|
| Property tax (1% of price a year) | $370 |
| Home insurance (0.5% of price a year) | $185 |
| Housing payment (28% of income) | $2,800 |
The $355,187 loan is closest to the $350k mortgage payment page, which shows that loan across rates and terms.
By down payment
A smaller down payment means a larger loan for each dollar of price, so the same budget buys less: $380,981 with 3.5% down against $443,983 with 20% down.
| Down payment | Max price | Cash down | Loan |
|---|---|---|---|
| 3.5% | $380,981 | $13,334 | $367,646 |
| 5% | $385,960 | $19,298 | $366,662 |
| 10% | $403,539 | $40,354 | $363,185 |
| 20% | $443,983 | $88,797 | $355,187 |
Under 20% down, conventional loans usually add private mortgage insurance, and FHA loans (3.5% minimum down for many borrowers) add mortgage insurance premiums. Neither is included, so the rows under 20% overstate the price.
With other monthly debts
Car, student loan and card minimum payments count against the 36% limit. At this salary they start to lower the price above $800 a month (8% of gross monthly income).
| Other debts | Housing budget | Max price | Limit that binds |
|---|---|---|---|
| $0 a month | $2,800 | $443,983 | 28% housing |
| $300 a month | $2,800 | $443,983 | 28% housing |
| $600 a month | $2,800 | $443,983 | 28% housing |
| $1,000 a month | $2,600 | $412,270 | 36% total debt |
By interest rate
| Rate | Max price | Loan |
|---|---|---|
| 5.5% | $483,399 | $386,719 |
| 6% | $463,085 | $370,468 |
| 6.5% reference | $443,983 | $355,187 |
| 7% | $426,023 | $340,818 |
| 7.5% | $409,134 | $327,308 |
The monthly budget is the same on every row; only the share that goes to interest changes. The site has no rate feed.
Against state median home values
At the placeholder costs, the $443,983 maximum is at or above the median home value in 42 of the 50 states and DC, all but California, Colorado, District of Columbia, Hawaii, Massachusetts, New Jersey, Oregon, Utah and Washington.
Property tax and insurance differ by state, so the price differs too. With each state’s own effective tax rate and average premium in place of the placeholders, the maximum covers the median value in 42 states and runs from $391,877 in New Jersey to $505,960 in Hawaii.
| State | Median value | Tax rate | Insurance a year | Max price | Share of median |
|---|---|---|---|---|---|
| The 5 states where it goes furthest | |||||
| West Virginia | $162,600 | 0.53% | $1,179 | $491,240 | 302% |
| Mississippi | $169,800 | 0.72% | $2,029 | $465,416 | 274% |
| Arkansas | $188,000 | 0.55% | $1,870 | $479,230 | 255% |
| Alabama | $209,900 | 0.38% | $1,906 | $491,893 | 234% |
| Kentucky | $205,600 | 0.75% | $1,525 | $470,389 | 229% |
| The 5 states where it goes least far | |||||
| Hawaii | $839,100 | 0.27% | $1,549 | $505,960 | 60% |
| California | $734,700 | 0.70% | $1,655 | $472,190 | 64% |
| District of Columbia | $737,100 | 0.58% | $1,545 | $481,824 | 65% |
| Massachusetts | $562,100 | 1.07% | $2,134 | $441,080 | 78% |
| Washington | $564,600 | 0.81% | $1,232 | $470,821 | 83% |
Median values and tax rates: Census ACS 2020–2024 (owner estimates in 2024 dollars, not sale prices). Insurance: NAIC HO-3 average premium, 2023. The tax rate is the median tax bill divided by the median value. Local prices, tax bills and premiums vary widely within a state.
Assumptions
- Defaults: 20% down, a 30-year fixed loan at an illustrative 6.5% (not a current rate), property tax of 1% and home insurance of 0.5% of the price per year, no HOA dues and no other monthly debts.
- The housing payment (principal, interest, tax and insurance) is capped at 28% of gross monthly income, and housing plus other debts at 36%; the lower cap sets the budget. 28% is a common rule of thumb; 36% is the Fannie Mae maximum for manually underwritten loans, which it allows to be exceeded in some cases. Lenders set their own limits, so this is not an approval estimate.
- Excluded: private mortgage insurance, FHA mortgage insurance, HOA dues, closing costs, cash reserves and credit score effects. Property tax and insurance vary widely by state and county, so replace the placeholders with local figures.
- Salary means gross (before-tax) yearly income. Figures are rounded to whole dollars; the calculator shows cents.
Questions
How much house can I afford on a $120k salary?
About $443,983 with 20% down ($88,797), no other debts, a 30-year loan at an illustrative 6.5%, and property tax and insurance of 1.5% of the price a year. That is 3.70 times the salary. The 28% housing limit sets the figure.
What is 28% of a $120k salary per month?
$2,800 a month: $120,000 ÷ 12 = $10,000, and 28% of that is $2,800. It must cover principal, interest, property tax and insurance; at the defaults that is $2,245, $370 and $185.
When do other debts lower the price?
When they exceed $800 a month, 8% of gross monthly income. Above that, housing plus debts would pass 36% before housing alone reaches 28%, so the 36% limit sets a lower budget.
How much home can I afford with a 120k salary and 10% down?
About $403,539, with $40,354 down and a $363,185 loan. A conventional loan with under 20% down usually adds PMI, which is not included and would lower the price.
In which states does a $120k salary cover the median home?
With each state’s own effective property tax rate and average insurance premium, the maximum price is at or above the state’s median home value (Census ACS 2020–2024) in 42 of the 50 states and DC. It covers the most in West Virginia ($491,240 against a $162,600 median) and the least in Hawaii ($505,960 against $839,100). Medians are owner estimates, not sale prices.
Sources
- CFPB: can I afford to buy a home and take out a mortgage?
- CFPB: what is a debt-to-income ratio?
- Fannie Mae Selling Guide B3-6-02: debt-to-income ratios
- CFPB: what is private mortgage insurance?
- U.S. Census Bureau, American Community Survey 2020–2024 5-year estimates, B25077 and B25103 (state median home value and taxes), retrieved 2026-09-25
- NAIC Homeowners Insurance Report: data for 2023, HO-3 average premium by state, retrieved 2026-09-25
These references explain the concepts behind the calculation. They do not endorse this site. Estimates leave out any cost or condition you did not enter.