With a $100,000 annual salary, the amount of house you can afford depends on several factors including your monthly debts, down payment, interest rates, and lender guidelines. Here are key points to consider:
- General affordability rule: Most lenders recommend that your monthly mortgage payment should not exceed about 28% of your gross monthly income. For a $100K salary, that is roughly $2,333 per month
- Home price estimate: Based on typical assumptions (minimal debt, 6.5% interest rate, and a $30,000 down payment), you could afford a home priced around $311,000 to $378,000
- Income multiples: Many lenders use income multiples to determine borrowing capacity. Common multiples range from 4 to 4.5 times your annual income, meaning you could borrow between $400,000 and $450,000. Some lenders may go up to 5 or 6 times income ($500,000 to $600,000), but these are less common and often require specialist approval
- Debt and other expenses: Your existing monthly debts (car payments, credit cards, student loans) reduce how much you can afford. The 28/36 rule suggests housing costs should not exceed 28% of income and total debts no more than 36% of income
- Down payment and credit: A larger down payment improves affordability and loan approval chances. Good credit also helps secure lower interest rates, reducing monthly payments and increasing affordability
In summary, with a $100,000 salary, you can generally afford a house priced between approximately $310,000 and $450,000, depending on your debt, down payment, and interest rate. To get a precise figure tailored to your situation, using an affordability calculator or consulting a mortgage advisor is recommended
