How Much House Can I Afford on $120,000 a Year?
On a $120,000 salary, you can typically afford a home around $394,000 using standard 28/43 debt-to-income limits, assuming about $60,000 down, modest existing debts, and a 6.85% rate. More debt or a smaller down payment lowers this; a bigger down payment raises it.
Frequently asked questions
How much house can I afford on $120,000?
Roughly $394,000 under the common 28/43 DTI rule, with about $60,000 down at 6.85%. Your monthly payment would be near $2,792.66.
What's the 28/36 (or 28/43) rule?
Lenders prefer your housing payment under 28% of gross income (front-end) and total debts under 36–43% (back-end). The lower of those two limits caps how much you can borrow.
How does my down payment change what I can afford?
A larger down payment reduces your loan and can remove PMI, lowering your monthly payment — which lets you qualify for a higher purchase price at the same income.
Sources: Freddie Mac Primary Mortgage Market Survey; Tax Foundation — Property Taxes by State; Consumer Financial Protection Bureau.
Estimates for educational purposes only — not a loan offer, financial advice, or a commitment to lend. Actual rates, payments, and terms vary by lender and creditworthiness.