How Much Income You Need to Buy a $900k, $1M, and $1.25M House
It’s no secret that lenders use your income to determine how large of a loan to approve you for. The more money you need to borrow, the higher the income level you’ll need to qualify. But what about when you’re shopping for homes in the million-dollar range?
We’ll go over just how much monthly income you need to buy a $900k, $1M, and $1.25M house, as well as some different situations that could impact your final figure.
Note: All figures are estimates and are not a commitment to lend. Speak to a licensed mortgage professional for personalized information.
How Much Income Do You Need to Buy a $900k House?
Based on our methodology, explained in full toward the end of the article, the all-inclusive monthly payment on a $900k house would be $7,192 with 5% down and using other assumptions detailed at the end of this article. To qualify for this mortgage, you must earn at least $19,978 per month – approximately $239,736 per year.
Income Needed for a $900k House With Other Debts
Assuming a 45% back-end DTI, a borrower earning $19,978 per month could have total debt as high as $8,990. This means that, in addition to your mortgage, you can have up to $1,798 in other monthly obligations without diminishing your purchasing power.
Here’s an idea of what having more monthly debt could do to the level of income needed to purchase a $900k house.
Mortgage Payment | Other Existing Debts | Total Monthly Debt | Income Needed |
$7,192 | $1,750 | $8,942 | $19,978 |
$7,192 | $2,000 | $9,192 | $20,427 |
$7,192 | $2,250 | $9,442 | $20,982 |
$7,192 | $2,500 | $9,692 | $21,538 |
$7,192 | $2,750 | $9,942 | $22,093 |
$7,192 | $3,000 | $10,192 | $22,649 |
$7,192 | $3,250 | $10,442 | $23,204 |
$7,192 | $3,500 | $10,692 | $23,760 |
How Interest Rates Affect the Income Needed for a $900k Home
Our calculations are based on an estimated interest rate of 6.971%. However, your actual rate will likely be different. Here’s how much income you need to buy a $900k house with different interest rates in our example scenario.
Interest Rate | Monthly Payment | Income Needed |
5.00% | $6,111 | $16,975 |
5.25% | $6,242 | $17,339 |
5.50% | $6,375 | $17,708 |
5.75% | $6,510 | $18,083 |
6.00% | $6,647 | $18,464 |
6.25% | $6,785 | $18,847 |
6.50% | $6,925 | $19,236 |
6.75% | $7,066 | $19,628 |
7.00% | $7,209 | $20,025 |
7.25% | $7,353 | $20,425 |
7.50% | $7,499 | $20,831 |
7.75% | $7,646 | $21,239 |
8.00% | $7,794 | $21,650 |
8.25% | $7,944 | $22,067 |
8.50% | $8,095 | $22,486 |
8.75% | $8,247 | $22,908 |
9.00% | $8,400 | $23,333 |
Income Needed for a $900k House With a Larger Down Payment
A 5% down payment equals $45,000 on a $900k home. This is the minimum for most conventional and some jumbo loans. Putting down more will lower your monthly payments and help you qualify for a mortgage on a lower income.
Down Payment (%) | 5% | 10% | 15% | 20% |
Down Payment ($) | $45,000 | $90,000 | $135,000 | $180,000 |
Amount Financed | $855,000 | $810,000 | $765,000 | $720,000 |
Monthly Payment | $7,192 | $6,812 | $6,446 | $6,026 |
Income Needed | $19,978 | $18,922 | $17,906 | $16,739 |
Income Needed for a $900k Mortgage (Not Home Price)
Maybe $900k is the loan size you need – not the price of the home. Based on our standard assumptions, this would equal monthly payments of $7,545. With a 36% front-end housing ratio, the minimum income needed for a $900k mortgage would be $20,958 – about $251,000 annually.
How Much Income Do You Need to Buy a $1M House?
Going by our standard assumptions, you would pay around $7,936 per month on a $1M house. To qualify for a sufficient mortgage, you’ll need to earn at least $22,044 monthly. This is around $264,528 on an annual basis.
Income Needed for a $1M House With Other Debts
With an income of $22,044, lenders abiding by a 45% back-end DTI would accept total monthly expenses of up to $9,920. This limit allows for around $1,984 in other debts beyond your housing costs.
If your other debts total more, you can expect to get approved for a smaller loan amount. Here are some examples of different debt levels and the income needed to buy a $1M home.
Mortgage Payment | Other Existing Debts | Total Monthly Debt | Income Needed |
$7,936 | $1,750 | $9,686 | $22,044 |
$7,936 | $2,000 | $9,936 | $22,080 |
$7,936 | $2,250 | $10,186 | $22,636 |
$7,936 | $2,500 | $10,436 | $23,191 |
$7,936 | $2,750 | $10,686 | $23,747 |
$7,936 | $3,000 | $10,936 | $24,302 |
$7,936 | $3,250 | $11,186 | $24,858 |
$7,936 | $3,500 | $11,436 | $25,413 |
How Interest Rates Affect the Income Needed for a $1M Home
Your interest rate can drastically change your payment and the income needed for a $1 million mortgage. Our sample scenario uses an interest rate of 6.971%, but this is just an example. Well-qualified buyers could get quoted lower, while riskier loans may come with higher rates.
Here's an idea of what your monthly payment and necessary income might look like based on the rate you receive.
Interest Rate | Monthly Payment | Income Needed |
5.00% | $6,734 | $18,706 |
5.25% | $6,880 | $19,111 |
5.50% | $7,028 | $19,522 |
5.75% | $7,178 | $19,939 |
6.00% | $7,330 | $20,361 |
6.25% | $7,483 | $20,786 |
6.50% | $7,639 | $21,219 |
6.75% | $7,796 | $21,656 |
7.00% | $7,955 | $22,097 |
7.25% | $8,115 | $22,542 |
7.50% | $8,277 | $22,992 |
7.75% | $8,440 | $23,444 |
8.00% | $8,605 | $23,903 |
8.25% | $8,771 | $24,364 |
8.50% | $8,939 | $24,831 |
8.75% | $9,108 | $25,300 |
9.00% | $9,278 | $25,772 |
Income Needed for a $1M House With a Larger Down Payment
In our scenario, a buyer putting 5% down would need a monthly income of $22,044 to get a mortgage on a $1 million house. But by putting more down, you can shrink your payment and reduce the income level needed to qualify. With a 20% down payment, you could buy a $1M home while making just $18,444 per month. Keep in mind that you likely need a jumbo loan. While 5-10% down on a jumbo loan is possible, you probably need a stellar borrower profile.
Down Payment (%) | 5% | 10% | 15% | 20% |
Down Payment ($) | $50,000 | $100,000 | $150,000 | $200,000 |
Amount Financed | $950,000 | $900,000 | $850,000 | $800,000 |
Monthly Payment | $7,936 | $7,514 | $7,106 | $6,640 |
Income Needed | $22,044 | $20,872 | $19,739 | $18,444 |
Income Needed for a $1 Million Mortgage (Not Home Price)
Is $1 Million the size of the mortgage you’re after? If so, you can expect monthly payments of around $8,327, based on our methodology. This means the income needed for a $1 million mortgage would be $23,131, assuming a 36% front-end DTI.
How Much Income Do You Need to Buy a $1.25M House?
Using our set of assumptions, the monthly mortgage on a $1.25M house would be $9,795. Based on that figure, you would need to earn at least $27,208 per month to qualify. This translates to an annual income of approximately $326,496.
Income Needed for a $1.25M House With Other Debts
With an assumed 45% back-end DTI, you could qualify to buy a $1.25M house with up to $12,244 total monthly debt on an income of $27,208. Deducting your estimated mortgage payment would leave around $2,449 for other debt obligations.
Here's an idea of how higher debt levels could impact the amount you need to earn to qualify for an appropriately sized loan.
Mortgage Payment | Other Existing Debts | Total Monthly Debt | Income Needed |
$9,795 | $2,250 | $12,045 | $27,208 |
$9,795 | $2,500 | $12,295 | $27,322 |
$9,795 | $2,750 | $12,545 | $27,878 |
$9,795 | $3,000 | $12,795 | $28,433 |
$9,795 | $3,250 | $13,045 | $28,989 |
$9,795 | $3,500 | $13,295 | $29,544 |
$9,795 | $3,750 | $13,545 | $30,100 |
$9,795 | $4,000 | $13,795 | $30,656 |
How Interest Rates Affect the Income Needed for a $1.25M Home
The larger your loan, the more impactful small changes to the interest rate will be. When buying a $1.25M house, a 1% rate change could mean a $2,000-plus difference in the income needed to support your purchase.
Your actual rate will depend on your individual situation and the lender you choose. Here is an example of how varying rates could affect your monthly payment and the income you'd need to qualify for a $1.25M home.
Interest Rate | Monthly Payment | Income Needed |
5.00% | $8,292 | $23,033 |
5.25% | $8,475 | $23,542 |
5.50% | $8,660 | $24,056 |
5.75% | $8,848 | $24,578 |
6.00% | $9,037 | $25,103 |
6.25% | $9,229 | $25,636 |
6.50% | $9,424 | $26,178 |
6.75% | $9,620 | $26,722 |
7.00% | $9,818 | $27,272 |
7.25% | $10,019 | $27,831 |
7.50% | $10,221 | $28,392 |
7.75% | $10,425 | $28,958 |
8.00% | $10,631 | $29,531 |
8.25% | $10,839 | $30,108 |
8.50% | $11,049 | $30,692 |
8.75% | $11,260 | $31,278 |
9.00% | $11,473 | $31,869 |
Income Needed for a $1.25M House With a Larger Down Payment
Our required income estimate of $27,208 is based on a 5% down payment. However, it's not uncommon for buyers of $1.25M homes to put down more. The less you need to borrow, the lower the income you'll need to support the loan.
If you can put 20% down, the income needed for a $1.25 million mortgage would be around $4,500 less per month than someone putting 5% down.
Down Payment (%) | 5% | 10% | 15% | 20% |
Down Payment ($) | $62,500 | $125,000 | $187,500 | $250,000 |
Amount Financed | $1,187,500 | $1,125,000 | $1,062,500 | $1,000,000 |
Monthly Payment | $9,795 | $9,267 | $8,758 | $8,175 |
Income Needed | $27,208 | $25,742 | $24,328 | $22,708 |
Income Needed for a $1.25 Million Mortgage (Not Home Price)
If you need to borrow a full $1.25 million for your purchase, your estimated all-inclusive payments would be around $10,284 monthly. Based on this total, the income needed for a $1.25 million mortgage would be approximately $28,567, with 36% attributed to housing expenses.
What Size Home Loan Do You Qualify For?
While your income serves a primary role in determining what price house you can afford, other elements come into play. A borrower with a low-interest rate and a sizeable down payment on a $900k, $1M, or $1.25M home could qualify with lower income than someone with less-perfect credit or more limited funds to put down.
Ultimately, there are many facets to consider, and it's challenging to get an accurate figure without discussing your individual situation with a mortgage professional. To determine what size home loan you qualify for, check today's best rates and apply with a well-respected lender.
Methodology for Mortgage Calculations
As you’ve seen from our example scenarios, plenty of different factors can impact the amount of income you’ll need to earn in order to qualify for a mortgage. For our base calculations, however, we assumed (except where otherwise noted):
Mortgages are 30-year fixed-rate conventional or similar jumbo loan
Estimated interest rate is 6.971% - the average rate on the MRC rate tracker at the time of writing
The down payment is equal to 5% of the purchase price
Annual taxes are assessed at 1% of the purchase price
Homeowners insurance has a $500 monthly premium
Mortgage insurance is based on current MGIC rates for borrowers with a credit score of 760
There are no homeowners association dues, and closing costs have not been wrapped into the loan
Lenders allow for a front-end (housing) DTI of 36% and a back-end (total) DTI of 45%
Note: While the calculations in this article are based on a conventional mortgage, single-family limits on conforming loans in most parts of the country are $766,550 for 2024. There are, however, 110 high-cost areas where you can get a conventional loan for nearly $1.15 million.
If you live outside of these areas or need a mortgage larger than the expanded limit, you’ll probably want to consider a jumbo loan instead.
