For a 100k Salary, How Much Home Can You Afford?

Earning a six-figure salary is no small feat—it takes dedication, skill, and hard work. But when it comes to buying a home, even a $100,000 income might not stretch as far as you’d expect. A recent survey shows that nearly 49% of people earning this amount are still living paycheck to paycheck.

So, does that mean $100,000 isn’t a solid income? Not at all. It’s well above the national median household income of $70,784, according to Census data. However, rising mortgage rates and persistent inflation have made it increasingly difficult to afford a dream home—even on a six-figure salary.

For a $100K Salary, How Much Home Can I Afford?

Let’s say you make around $100,000 a year. If your credit score is in good shape, you don’t have much debt, and your debt-to-income ratio is under 43%, a lender might say you can afford a monthly payment of around $3,500—that includes your mortgage, property taxes, insurance, and interest.

At today’s interest rates, that could mean a mortgage approval for a home worth around $650,000. Sounds great on paper, right? But when you factor in the rest of your expenses—groceries, gas, utilities, savings—it gets tight pretty fast with only about $3,800 left over each month.

That’s why it’s a good idea to flip the process. Instead of finding a house first and then trying to make the numbers work, figure out how much you’re actually comfortable spending each month. From there, work backwards to figure out your ideal price range.

Total Mortgage’s Mortgage Calculator is a great place to start—it can help you play around with the numbers and see what fits your budget best.

Bottom line: focus on what feels affordable, not just what you qualify for.

Determining How Much House You Can Afford

Your income plays a big role in how much house you can afford. But it’s definitely not the only factor. Lenders look at the full picture. Here’s what else comes into play:

1. Your Credit Record

A strong credit score can help you get better interest rates, while a lower score could mean higher monthly payments. But it's not just about the score—your full financial history matters.

Things to keep in mind:

• Credit score matters: The better your score, the lower your interest rate.

• Debt-to-income ratio (DTI):  Mortgage lenders look at how much debt you carry compared to your income.

• The 28/36 rule: Ideally, no more than 28% of your income should go toward housing, and no more than 36% toward total debt (including credit cards, car loans, etc.).

• Employment history:  Mortgage lenders want to see a steady income, so your job history will be reviewed too.

The more stable and healthy your financial profile, the more confident lenders will feel—and that gives you more buying power.

2. Savings

With a $ 100,000 salary, saving money is essential. A solid savings cushion helps you make a larger down payment, which in turn lowers your loan-to-value (LTV) ratio. Most lenders prefer an 80/20 LTV—meaning you cover 20% of the home’s cost upfront and borrow the remaining 80%. The more you can pay upfront, the less you’ll need to borrow (and pay interest on).

3. Location

Where you live has a huge impact on affordability. Big cities come with high costs—housing, utilities, groceries, everything. Consider looking at homes in areas where the cost of living is more manageable, even if it’s not your “forever home.” Think of it as a smart stepping stone.

4. Financing Options

There are many mortgage options available, including FHA, VA, USDA, and conventional loans, to name a few. If you're a first-time homebuyer, you might also qualify for grants or special assistance programs that can reduce your upfront costs.

Getting preapproved for a mortgage enables you to understand what a lender is actually willing to offer, which makes it easier to set a realistic home-buying budget. And don’t settle on the first offer—compare lenders to find the best rates and terms for your situation.

5. Stay Patient

Sometimes the market or your finances just aren’t where you want them to be—and that’s okay. Use that time to save more, boost your credit score, or pay down existing debts. Avoid taking on any new debts that could hurt your credit. When you’re ready, talk to a trusted mortgage expert like the ones at Total Mortgage to guide you through the process.

What Else Affects How Much House You Can Afford?

Buying a home isn’t just about your income. Several other factors come into play—and understanding them can help you make smarter decisions.

1. Your Budget

Start by making a detailed budget. If you’re buying with a partner, decide how you'll split costs. Account for all income sources and factor in everything from mortgage payments to insurance, property taxes, and home maintenance.

2. Your Expenses

Take a hard look at your current monthly expenses, like groceries, utilities, phone bills, subscriptions, etc. Just don’t include rent in this equation since you won’t be paying it after buying.

How Much House Can I Afford on Any Salary?

Before starting your homebuying journey, you need to be confident about your financial readiness to purchase a home. This means thinking through a few important factors:

• You are debt-free.

• You have a few months to build or maintain an emergency fund.

• You’re able to pay at least 10%–20% as a down payment.

• You’re prepared to cover closing costs and moving expenses.

• Your estimated monthly mortgage payment is 25% or less of your monthly income.

• You’ve decided on a loan term—the shorter, the better (ideally a 15-year fixed mortgage).

• You have funds set aside for home maintenance and utilities.

If any of the above doesn't quite apply to your current situation, it might not be the best time to pursue your dream home. And if you're newly married, it's often a good idea to wait at least a year before buying, so you have time to settle into your financial rhythm.

The 36 Percent Rule

The 36% rule refers to your debt-to-income (DTI) ratio—specifically the back-end ratio. This isn't to be confused with the 28/36 rule. The 36% DTI takes into account all of your monthly debt obligations, including housing costs, credit card payments, car loans, and any other recurring debts.

Here’s how it works:
If your annual salary is $100,000, the 36% rule suggests that your total monthly debt payments should not go beyond $3,000.

Some lenders may allow for a higher Debt-to-income ratio up to 42% but it’s always wise to be conservative. Sticking to the 36% rule (or lower) gives you more breathing room and helps you stay financially stable.

No matter which “percent rule” you follow, the key is to stay disciplined with your financial planning. This ensures you don’t stretch your budget to the breaking point—especially when taking on something as significant as a mortgage.

Different Costs of a Monthly Mortgage Payment

A monthly mortgage payment usually includes four main components:

• Principal and Interest:
  The principal is the loan amount, while interest is the cost of borrowing that money. Together, they form the core of your monthly payment.

• Property Taxes:
  These are often included in your monthly mortgage payment & held in an escrow account. The tax amount is usually proportional to the value of the home.

• Homeowners Insurance and PMI:
  Homeowners insurance protects your property against damage from events like fire, natural disasters, or theft. If your down payment is less than 20%, you’ll likely need to pay Private Mortgage Insurance (PMI) as well.

• HOA Fees:
  If your home is in a community with a homeowner’s association, you’ll need to pay HOA fees. These cover services like landscaping, maintenance, and trash removal.

Note: Many online mortgage calculators don’t include all of these costs, which can lead to underestimated monthly payments. That’s why it’s important to use tools that provide a comprehensive breakdown.

For accurate estimates, try the mortgage calculators at Total Mortgage, or speak directly with one of our lenders for a free custom estimate based on your full financial picture.

Make Buying a House a Holistic Goal

When buying a home, think long-term. Many buyers focus on short-term affordability and overlook bigger goals like saving for retirement or their child’s education.

A smart move is to build in a cushion. For example, if your budget allows for a $3,000 mortgage, consider limiting yourself to $2,500. This gives you breathing room and makes managing your finances less stressful.

Buying a home is a significant milestone—and one that affects your long-term financial health. Be intentional, plan carefully, and reach out to the experts at Total Mortgage to help make the process smooth and well-informed.