How much do I need to make for $1.5M home?
I’m aware there’s a lot to consider here but I’m more asking for anecdotal experiences and opinions.
With that, how much would you need to make in annual income to feel comfortable affording a $1.5M home today? Is $500k in household income more than enough or would you
Not enough information to say for sure. Entirely depends on your down payment.
If you're making a down payment of 20% ($300k), then yes $500k of income would, in all likelihood, be more than enough income.
Assuming a $300k down payment, a 6% interest rate on a 30yr mortgage, with modest insurance and property taxes, your monthly payment would be around $7,600. Using the 30% rule, your gross income should then be around $25.3k per month or $304k per year.
Again, there's no hard and fast rule that "$500k per year is enough income to afford a $1.5M house" but most of the time it should be.
Add $1-2k if its a condo in NYC but this nailed it.
30% rule doesn’t scale very well. You’re gonna get hosed on taxes at that income level. So $25k per month pre tax is more like $13k post tax. That’s a lot of money (% basis) going towards housing.
If you make half a million a year and can't afford a $1.5M house, you are doing a lot of other things incorrectly.
LOL bro first thing I thought was wtf - and then ran to comments
Thanks for the comments. I’m getting caught up because I’m currently spending 20% of my net post tax income on rent. To spend 20% net on a mortgage with taxes insurance, etc. I’m far off snd 500k wouldn’t work. Guess people are just spending a lot more for housing. I’m not at that stage of life yet so this was more for my own curiosity
Blanditiis dolores autem praesentium non minima reiciendis. Expedita aut voluptatem culpa qui vitae. Et quasi optio aut fugiat.
Molestiae ipsa voluptatem dolorem numquam vero. Aliquam doloremque labore necessitatibus quod accusantium qui itaque. Eos eaque deserunt enim iusto laboriosam eligendi consequuntur. Perspiciatis tempora et omnis reprehenderit reiciendis adipisci. Consequatur quia expedita quis sed recusandae consequatur.
Natus quia dolor qui temporibus qui corporis recusandae. Eum delectus accusamus pariatur quia velit repudiandae rerum voluptates.
Fugiat excepturi in quo quis. Cupiditate sunt quia quis. Asperiores dicta blanditiis alias ut. Omnis qui incidunt vitae dicta libero aut rerum. Blanditiis labore aut occaecati voluptatem.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Quia eos est doloremque dolores sit quis similique. Odio aut ex et vel illo mollitia. Dolores porro voluptas sed vitae neque. Sit saepe velit corporis architecto illo velit aut. Repellendus eum omnis ullam beatae perferendis odio nihil.
Quae nihil laborum rerum dolores non exercitationem velit. Dignissimos molestiae enim sunt esse minus at. Et qui tempore qui aut perspiciatis. Aut vel et sed itaque nam ex facere.
Asperiores ab velit et id blanditiis voluptatum. Fugiat quas voluptatem nostrum vero modi ipsa. Sint fuga rerum aut.
Voluptas fugit et in dicta et cum. Et voluptates aspernatur magni natus sed. Repellat modi quia praesentium dolorem dolore. Qui maiores quaerat eius quis. Ea ullam quaerat non quam quo impedit.