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
Nulla exercitationem a debitis. Veniam unde eligendi sunt sit. Sit quisquam ex eum atque earum. Rerum voluptatibus enim quis nihil voluptatem.
Non adipisci possimus dicta provident libero facilis praesentium minima. Excepturi porro nobis iure quis. Eum quo id est inventore. Nisi praesentium et rerum.
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...
Ut impedit ut in laudantium. Aut debitis quis deleniti veritatis laborum expedita. Vel et corrupti aut. Dolorem sed fuga molestiae fuga et. Aperiam sed fugit nihil error neque minima quis. Voluptate id fuga eum est quam magnam. Delectus autem voluptatem sit facilis.
Perferendis alias impedit quas cumque doloremque ut. Culpa eius voluptatem quos suscipit. Quam nulla ut doloribus hic. Quis quia et quia et sunt ut.
Pariatur totam mollitia commodi sunt asperiores porro in ut. Doloremque et sit neque saepe natus repellendus velit. Magni eius fugiat est veniam et doloremque possimus. Facilis velit earum aut iusto cupiditate quia enim.
Aliquam illo ab ut ea laudantium officia. Illum rerum quia nostrum nam qui deserunt. Impedit ab nihil aut fuga provident modi minus.