Shopping for a $700k house is a giant milestone however how a lot do you really want to earn to afford it? Whereas your down cost, credit score rating, and debt all play a job, the earnings wanted for a $700k mortgage is the largest consider figuring out whether or not this home matches your finances.
Whether or not you’re planning to purchase a home in Philadelphia, PA or a townhome in Chicago, IL, this Redfin information will stroll you thru what to anticipate and easy methods to put together.
The quick reply
Most patrons have to earn $175,000 to $235,000 per yr to afford a $700,000 house.
This assumes common rates of interest, an ordinary mortgage time period, and a modest down cost.
Your precise earnings wants could fluctuate primarily based in your debt, credit score rating, and month-to-month bills.
What’s the earnings wanted for a $700k home?
A great place to begin is the 28/36 rule, a typical customary utilized by mortgage lenders:
28% rule: Your month-to-month housing prices (together with mortgage, taxes, insurance coverage) needs to be not more than 28% of your gross month-to-month earnings.
36% rule: Your whole month-to-month debt (housing + bank cards, auto loans, pupil loans, and many others.) ought to keep beneath 36% of your gross earnings.
For instance, in case your estimated month-to-month housing price is $4,000, you’d have to earn round $175,000 per yr to remain inside these limits. That earnings requirement could also be larger when you’ve got further debt or reside in an space with excessive property taxes or insurance coverage prices.
Calculator>> How A lot Home Can I Afford?
Pattern Situation: What $700k appears to be like like in month-to-month prices
Let’s stroll by means of a primary instance.
Residence value: $700,000
Down cost: 20% ($140,000)
Mortgage quantity: $630,000
Rate of interest: 7.00% (30-year mounted)
Estimated month-to-month mortgage cost (P&I): ~$3,726/month
Property taxes + owners insurance coverage: ~$1,009
Whole estimated month-to-month housing price: ~$4,735
On this case, a purchaser would doubtless have to earn round $203,000 yearly to qualify comfortably. If additionally they had $1,000 in different month-to-month money owed (bank cards, automotive loans, and many others.), their required earnings would doubtless rise.
Remember that placing down lower than 20% typically means including personal mortgage insurance coverage (PMI), which bumps up your month-to-month cost and pushes the required earnings even larger.
Elements that affect how a lot home you possibly can afford
The earnings wanted for a $700k mortgage isn’t nearly your wage. Listed below are six main components that affect your affordability:
1. Down cost
A bigger down cost lowers your mortgage quantity, reduces your month-to-month cost, and may help you keep away from PMI.
20% down avoids PMI and saves on curiosity
10% down means the next month-to-month price
3% down may fit for first-time patrons however comes with added charges
2. Credit score rating
Larger scores normally unlock higher rates of interest, which may prevent lots of of {dollars} every month.
Learn>> How To Purchase A Home With Unhealthy Credit score
3. Rate of interest
Only a 1% distinction in your mortgage fee can shift your month-to-month cost by lots of. For a mortgage this measurement, it issues. For instance, on a $700k house with 10% down:
At 6.5%, your month-to-month cost may be $4,400
At 7.5%, it may soar to $4,950
As of June 2025, the typical 30-year mounted fee is round 7%, which is larger than charges seen in prior years.
4. Debt-to-income ratio (DTI)
Lenders look intently at how a lot of your earnings is already dedicated to different money owed. A decrease debt-to-income ratio (DTI) means extra borrowing energy.
5. Location-based prices
Property taxes and insurance coverage fluctuate by area and so they’re included in your month-to-month housing prices.
For example, the distinction proven within the examples beneath may add lots of to your month-to-month prices:
In Westchester County, NY or Cook dinner County, IL, annual property taxes on a $700k house may exceed $10,000
In Maricopa County, AZ or Bexar County, TX, you may pay nearer to $3,500 to $6,000
6. Ongoing obligations
Youngster assist, alimony, and even HOA charges shall be factored into your mortgage eligibility.
7. Financing
The mortgage kind (whether or not typical, FHA, VA, or one other mortgage) you select impacts your fee, down cost, and month-to-month price. Many states and cities supply down cost help or grant packages for first-time or income-qualified patrons, which may help scale back upfront bills and make a $700k mortgage extra attainable.
What it takes to afford a $700k house: Purchaser situations
Let’s evaluate three totally different purchaser profiles to see how variables like down cost, credit score rating, and debt have an effect on earnings necessities:
Purchaser ProfileDown PaymentCredit ScoreRateDebtMonthly Cost (PITI)Estimated Earnings
Conservative Buyer20% ($140,000)Glorious (760+)6.75%$300~$4,641~$199,000
Typical Buyer10% (70,000)Good (700-740)7.00%$600~$5,594~$240,000
Low Down Cost Buyer5% ($35,000)Honest (660–680)7.25%$1000~$5,961 (incl. PMI)~$255,000
These numbers provide you with a ballpark thought, however your precise mortgage eligibility will rely in your particular monetary image.
Suggestions that can assist you afford a $700k mortgage
If the numbers really feel simply out of attain, these methods can enhance your odds:
Increase your credit score rating: Decrease rates of interest imply decrease funds.
Pay down debt: Lowering your DTI expands your mortgage choices.
Enhance your down cost: Even an additional 5% could make a giant distinction.
Store round for lenders: Charges, charges, and mortgage packages fluctuate.
Discover down cost help: Native packages may assist bridge the hole, particularly for first-time homebuyers.
Add a co-borrower: A accomplice or partner with earnings may help you qualify.
Work with an actual property agent: An agent may help you keep on finances and negotiate higher offers.
Give attention to financial savings: Build up your financial savings for a bigger down cost can decrease your month-to-month prices and make it simpler to qualify for a $700k mortgage.
Learn>> What You Must Purchase a Home in 2025
FAQs: Your $700k mortgage questions answered
1. Can I afford a $700k mortgage on $150k earnings?
In all probability not, until your money owed are very low and you’ve got a large down cost. Most patrons want nearer to $170k-$200k yearly.
2. What if my credit score rating is underneath 700?
You may nonetheless qualify, however you could face larger charges, which can increase your required earnings.
3. Is it higher to place 10% or 20% down?
Placing 20% down avoids PMI and lowers your month-to-month price however 10% down should be possibility if that’s what your finances permits.
4. Ought to I embrace HOA charges when calculating affordability?
Completely. Lenders consider HOA charges as a part of your whole month-to-month housing expense.
5. How can I examine how a lot home I can afford?
Use an internet mortgage calculator or communicate to a lender for a personalised estimate.
6. The place can I discover $700,000 houses?Use Redfin’s house search device to discover listings in your goal space. You may set value filters, view tax estimates, and get alerts for brand spanking new listings or value drops.
