A home buyer earning a $200,000 gross annual salary may be able to afford a home that costs around $604,000 — with a monthly mortgage payment of around $4,700.
But how much house you can afford on a $200K salary may vary by tens of thousands of dollars. Your buying power depends on your financial situation (including the amount of non-housing debt you carry) and local costs.
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Calculator: Find out how much house you can afford on a $200,000 salary
How to use the "How much house can I afford?" calculator
This calculator determines how much house you can afford on a $200,000 salary based on your income and other financial factors.
Our calculator follows the 28/36 rule, which lenders and financial experts use to measure a potential home buyer's economic health. The rule states a buyer should spend no more than 28% of their gross monthly income on housing costs and no more than 36% of their gross monthly income on their total debts.
Here's a breakdown of what to input into each field of the calculator and how each component works.
Annual income
Enter your gross salary. Include your co-buyer's salary, too, if you have a co-buyer.
How much money you earn is central to determining how much house you can afford, but it's not all a lender needs to know. You'll also need to report any other regular income.
Other income
Enter any additional regular income for you and your co-buyer, if you have a co-buyer.
For instance, if you rent out a room in your house or have an eBay store as a side hustle, include the amount of money you make from those non-salary sources annually.
Location
Input your city and state. Your location determines the rates you'll pay for homeowner's insurance and property taxes.
Loan term
We've prefilled the loan term field with a 30-year term, the most common time span for a home loan. You also have the option for a 15-year mortgage.
Banks offer loans with other terms, but we're focusing on the most common options.
Down payment
Enter the amount of money or the percent of the house price you can pay upfront.
Home buyers who pay for their house with a loan usually put 3.5%–20% down. The typical first-time home buyer makes a down payment of 9% of the sale price.[1]
If you're planning to make a down payment of less than 20% on a conventional mortgage, you'll likely also have to pay private mortgage insurance (PMI). If you enter less than 20% in the down payment field, we'll prefill the PMI cost to 1.1% of the home price, which is about the average.
Generally, your monthly payments will be less the more you pay for your down payment.
Monthly debt
Enter the total amount of monthly non-housing debt you pay each month.
Non-housing debt typically includes minimum credit card payments, student loans, car payments, and financial assistance like alimony and child support.
Aim for combined non-housing and housing debts of no more than 36% of your gross income, per the 28/36 rule.
The Consumer Financial Protection Bureau says loans will typically go to consumers who carry debts of 43% of gross income or less. If the numbers you input into the calculator add up to a debt-to-income ratio of more than 43%, the calculator will signal that banks may reject your loan application.
Property tax
We've prefilled this field with the average effective property tax amount in the U.S. For a more specific estimate, check with your state, city, or county.
Homeowner's insurance
We've prefilled this field with the average homeowner's insurance costs in the U.S. For a more specific estimate, check with your state, city, or county.
HOA fees
Enter your monthly HOA fees if the home you're buying is in an HOA.
Credit score
Enter your credit score or best estimate.
The higher your credit score, the better the conditions you may get on your loan. We're using the average 30-year mortgage interest rate in the U.S. as a baseline, which is currently 6.62%.
More estimates for house hunters making $200K
- Put 20% down
- Finance with a conventional 30-year loan at the current interest rate of 6.62%
- Pay the average state annual property tax rate of 1.04%
- Pay the average state annual home insurance cost of $2,230
- Spend 0% of your gross monthly income on non-housing debts
- Put 20% down
- Finance with a conventional 30-year loan at current interest rate of 6.62%
- Pay the average state annual property tax rate of 1.04%
- Pay the average state annual home insurance cost of $2,230
- Spend 8% of your gross monthly income on non-housing debts
- Put 3.5% down
- Finance with a 30-year FHA loan at current interest rate of 6.62%
- Pay the average PMI of $241
- Pay the average state annual property tax rate of 1.04%
- Pay the average state annual home insurance cost of $2,230
- Spend 8% of your gross monthly income on non-housing debts
- Put 3.5% down
- Finance with a 30-year FHA loan at current interest rate of 6.62%
- Pay the average PMI of $3,714
- Pay the average state annual property tax rate of 1.04%
- Pay the average state annual home insurance cost of $2,230
- Spend 0% of your gross monthly income on non-housing debts
- Put 9% down
- Finance with a conventional 30-year loan at current interest rate of 6.62%
- Pay the average PMI of $3,020
- Pay the average state annual property tax rate of 1.04%
- Pay the average state annual home insurance cost of $2,230
- Spend 8% of your gross monthly income on non-housing debts
- Put 9% down
- Finance with a conventional 30-year loan at current interest rate of 6.62%
- Pay the average PMI of $3,883
- Pay the average state annual property tax rate of 1.04%
- Pay the average state annual home insurance cost of $2,230
- Spend 0% of your gross monthly income on non-housing debts
Four key factors that affect how much house you can afford on a $200K salary
Below, we break down how we arrived at our $604,000 estimate, including how you could control the major factors that impact house affordability to buy a more expensive home.
Your mortgage rate
Our $604,000 home price estimate uses the current 6.62% average rate for a 30-year mortgage.
The lower your mortgage interest rate, the lower your long-term cost of your house will be. That translates to lower monthly mortgage payments.
You can potentially get a rate lower than the 6.62% average on a 30-year mortgage by taking these steps:
Improve your credit score
Typically, the better your credit score, the lower your mortgage rate. Equifax, Experian, and TransUnion create the credit scores lenders use to help determine a buyer's interest rate.
Lenders usually provide the best rates to buyers with a credit score of 740 or above. A credit score of less than 750 doesn't disqualify you from getting a mortgage, but it affects the loan terms you can get from a lender and how much house you can afford.
Improve your debt-to-income ratio (DTI)
Generally, the less debt you owe, the better your loan terms.
Most lenders follow the 28/36 rule: no more than 28% of your gross income should go toward housing costs and 36% on total debts (including student loan or car payments). On a $200,000 salary, that's $6,000 a month on total debt, $4,667 of which would go toward housing.
The Consumer Financial Protection Bureau says some home lenders will go up to 43% or higher on DTI. But don't count on getting a good rate with that level of debt.
According to a National Association of Realtors survey, 48% of mortgage applicants who were denied a loan were rejected because their DTI was too high.
Shorten the loan term (time span)
The longer the term length of a loan, the higher the rates but the lower the monthly payments. Loans are commonly available as 15-, 20-, or 30-year terms.
Lenders typically offer 30-year mortgages at higher rates than 15-year mortgages, but monthly payments for the 30-year mortgage will be lower.
Lenders typically offer lower rates for 15-year mortgages — currently 5.82% — but the monthly payments will be higher.
Some lenders offer different term lengths with different rates.
Your down payment
Our $604,000 home price estimate uses a 9% down payment, the average most first-time home buyers put down.
The bigger your down payment for a loan, the lower your total loan and monthly payments. The lower your monthly payments, the more affordable your house will be.
Buyers who pay for their homes with a loan put between 3.5% and 20% down. The average first-time home buyer makes a down payment of 9% of the sale price.
If you have a conventional loan and put 3.5–20% down, you'll typically have to pay an additional 0.2%–2% of your total loan in private mortgage insurance (PMI). Lenders require PMI for conventional loans until you reach 20% home equity.
A few lenders do offer mortgages without PMI.
Make saving for a down payment a key part of your home-buying plan.
You may also qualify for a down payment assistance (DPA) program. DPA programs are generally designed for first-time and lower-income home buyers.
Your property tax rate
Our $604,000 home price estimate uses the average state annual property tax rate of 1.04%.
The more you have to pay in property taxes, the less money you have to pay for your mortgage and other housing-related costs.
Property taxes will add between 0.32% and 2.23% of the assessed value of your house to your annual homeownership costs. That's $1,933–$13,469 each year, on average.
Property taxes rise when your local government reassesses the value of your property, which happens once every few years, depending on the state. If your property value goes up, your taxes will likely increase.
You can move to another municipality that has lower property tax rates.
See below for the average tax rates and amounts you'll pay in each state.
| State | Effective tax rate | Annual cost | Monthly cost |
|---|---|---|---|
| Alabama | 0.40% | $2,416 | $201 |
| Alaska | 1.04% | $6,281 | $523 |
| Arizona | 0.63% | $3,805 | $317 |
| Arkansas | 0.64% | $3,865.43 | $322.12 |
| California | 0.75% | $4,530 | $377 |
| Colorado | 0.55% | $3,322 | $277 |
| Connecticut | 1.79% | $10,811 | $901 |
| Delaware | 0.61% | $3,684 | $307 |
| Florida | 0.91% | $5,496 | $458 |
| Georgia | 0.92% | $5,557 | $463 |
| Hawaii | 0.32% | $1,933 | $161 |
| Idaho | 0.67% | $4,047 | $337 |
| Illinois | 2.08% | $12,563 | $1,047 |
| Indiana | 0.84% | $5,073 | $423 |
| Iowa | 1.52% | $9,180 | $765 |
| Kansas | 1.34% | $8,093 | $674 |
| Kentucky | 0.83% | $5,013 | $418 |
| Louisiana | 0.56% | $3,382 | $282 |
| Maine | 1.24% | $7,489 | $624 |
| Maryland | 1.05% | $6,342 | $528 |
| Massachusetts | 1.14% | $6,885 | $574 |
| Michigan | 1.38% | $8,335 | $695 |
| Minnesota | 1.11% | $6,704 | $559 |
| Mississippi | 0.67% | $4,047 | $337 |
| Missouri | 1.01% | $6,100 | $508 |
| Montana | 0.74% | $4,469 | $372 |
| Nebraska | 1.63% | $9,845 | $820 |
| Nevada | 0.59% | $3,563 | $297 |
| New Hampshire | 1.93% | $11,657 | $971 |
| New Jersey | 2.23% | $13,469 | $1,122 |
| New Mexico | 0.67% | $4,047 | $337 |
| New York | 1.40% | $8,456 | $705 |
| North Carolina | 0.82% | $4,953 | $413 |
| North Dakota | 0.98% | $5,919 | $493 |
| Ohio | 1.59% | $9,603 | $800 |
| Oklahoma | 0.89% | $5,375 | $448 |
| Oregon | 0.93% | $5,617 | $468 |
| Pennsylvania | 1.49% | $8,999 | $750 |
| Rhode Island | 1.40% | $8,456 | $705 |
| South Carolina | 0.57% | $3,443 | $287 |
| South Dakota | 1.17% | $7,066 | $589 |
| Tennessee | 0.67% | $4,047 | $337 |
| Texas | 1.68% | $10,147 | $846 |
| Utah | 0.57% | $3,443 | $287 |
| Vermont | 1.83% | $11,053 | $921 |
| Virginia | 0.87% | $5,255 | $438 |
| Washington | 0.87% | $5,255 | $438 |
| West Virginia | 0.57% | $3,443 | $287 |
| Wisconsin | 1.61% | $9,724 | $810 |
| Wyoming | 0.56% | $3,382 | $282 |
Your home insurance cost
Our $604,000 home price estimate uses the average state annual home insurance cost of $2,230.
The more you have to pay in home insurance costs, the less money you have to pay for your mortgage and other housing-related costs.
Home insurance costs will add between $806 and $5,533 to annual homeownership costs.
Home insurance rates can fluctuate based on environmental hazards, changes in property value, claims you make, and other factors.
You can move to another municipality where home insurance costs are lower or to a region that’s less prone to wildfires, hurricanes, and other natural disasters.
Check the chart below to factor in how much of your home's assessed value and see the annual and monthly average insurance costs in your state.
| State | Annual cost | Monthly cost |
| Alabama | $2,745 | $229 |
| Alaska | $987 | $82 |
| Arizona | $2,000 | $167 |
| Arkansas | $3,056 | $255 |
| California | $1,453 | $121 |
| Colorado | $3,124 | $260 |
| Connecticut | $1,677 | $140 |
| Delaware | $966 | $81 |
| Florida | $5,533 | $461 |
| Georgia | $1,945 | $162 |
| Hawaii | $1,134 | $95 |
| Idaho | $1,265 | $105 |
| Illinois | $2,189 | $182 |
| Indiana | $1,655 | $138 |
| Iowa | $2,012 | $168 |
| Kansas | $4,103 | $342 |
| Kentucky | $3,113 | $259 |
| Louisiana | $4,274 | $356 |
| Maine | $1,190 | $99 |
| Maryland | $1,528 | $127 |
| Massachusetts | $1,622 | $135 |
| Michigan | $1,809 | $151 |
| Minnesota | $2,417 | $201 |
| Mississippi | $2,820 | $235 |
| Missouri | $2,065 | $172 |
| Montana | $2,521 | $210 |
| Nebraska | $5,249 | $437 |
| Nevada | $1,138 | $95 |
| New Hampshire | $973 | $81 |
| New Jersey | $1,112 | $93 |
| New Mexico | $2,058 | $172 |
| New York | $1,690 | $141 |
| North Carolina | $2,495 | $208 |
| North Dakota | $2,538 | $212 |
| Ohio | $1,188 | $99 |
| Oklahoma | $4,700 | $392 |
| Oregon | $986 | $82 |
| Pennsylvania | $1,149 | $96 |
| Rhode Island | $1,961 | $163 |
| South Carolina | $2,360 | $197 |
| South Dakota | $2,732 | $228 |
| Tennessee | $2,410 | $201 |
| Texas | $3,726 | $311 |
| Utah | $1,182 | $99 |
| Vermont | $806 | $67 |
| Virginia | $1,497 | $125 |
| Washington | $1,337 | $111 |
| West Virginia | $952 | $79 |
| Wisconsin | $1,154 | $96 |
| Wyoming | $1,352 | $113 |
Other factors to consider
Factor in 1.86% of the price of your house (or $6,658) for one-time closing costs.
Most buyers need to pay the following costs:
- Title and escrow charges
- Lender fees
- Mortgage recording fee
- Home inspection fees
- Moving expenses
If you have to join a homeowner's association, you'll likely be required to pay $200–$300 in monthly fees.
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Why trust us
Data sources
Our research team reviews trusted sources like federal and state governments websites, state and local realtor associations, and real estate professionals in our articles.
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