How Much House Can I Afford with a $60K Salary? | 2025

I make $60,000 a year: How much house can I afford?

Buying a home is one of the most significant financial decisions you’ll make. Understanding how much house you can afford is a crucial first step.

There are many factors that determine the size and type of mortgage you may qualify for. And while your income is a key component, your credit score, existing debts, and current mortgage rates also significantly influence the amount you can borrow.

This article will delve into the home price ranges you can explore with a $60K salary, the factors that affect loan eligibility, and practical strategies to enhance your home buying power.

In this article (Skip to...)

• What mortgage can I afford if I make $60K?
• $60K income mortgage payment breakdown
• Max home purchase price by down payment
• Max home purchase price by mortgage rate
• Max home purchase price by debt-to-income ratio
• Strategies to increase home buying power
• FAQ

If I make $60,000 a year, what mortgage can I afford?

Based on a $60,000 salary, you can generally afford a home priced between $194,000 and $299,000.

Two homebuyers with the same annual income of $60K could qualify for vastly different mortgage amounts. This is because lenders look beyond just your income when determining how much you qualify for.

Understanding the amount of mortgage you can afford starts with a fundamental question: what portion of your income can go toward housing expenses?

Lenders typically recommend spending no more than 28% of your gross monthly income on housing costs (though some allow for a higher percentage). This includes the mortgage payment, property taxes, and insurance.

For a $60,000 annual salary, this equates to about $1,400 per month for housing expenses.

While income is a significant component, other variables—like your credit score, down payment, debt-to-income (DTI) ratio, and the interest rate—impact the loan amount you can qualify for.

• Credit score: Your credit score directly impacts your interest rate and the loan program. Higher scores typically mean lower payments and increased affordability.
• Down payment: A larger down payment reduces your loan amount and raises the amount of home you can afford.
• Debt-to-income ratio: Lower debt levels improve your borrowing capacity.
• Interest rates: Lower rates reduce monthly payments, allowing for a higher purchase price.

For example, someone with a high credit score, minimal debt and a 10% down payment may qualify for the higher end of the range. Whereas a borrower with a lower credit score, higher debt and 3% down payment may fall closer to the lower end.

$60K income mortgage payment breakdown

A mortgage payment typically consists of several components (known as PITI) that together make up the total amount you pay monthly.

Principal: The principal is the amount borrowed from the lender to purchase the home. Each mortgage payment includes a portion that goes toward reducing this balance, which decreases over time.

Interest: Interest is the cost of borrowing money, calculated as a percentage of the loan amount. Early in the loan term, a larger portion of your payment goes toward interest, but this decreases over time as the principal is paid down.

Taxes: Lenders often collect property taxes as part of your monthly mortgage payment and place them into an escrow account. The taxes are then paid to your local government on your behalf. Property taxes are based on your home’s assessed value and the tax rate in your area.

Homeowner’s Insurance: Homeowner’s insurance protects your home and belongings against risks such as fire, theft, and natural disasters. Like property taxes, insurance premiums are often included in your mortgage payment and held in escrow.

Private Mortgage Insurance (PMI): If your down payment is less than 20%, you may be required to pay PMI. This insurance protects the lender in case you default on the loan. PMI costs vary but are typically a small percentage of your loan amount.

HOA Fees (if applicable): If your property is part of a homeowner’s association (HOA), you may need to pay monthly or annual HOA fees. These fees are not typically included in your mortgage payment and are billed separately, but lenders still count them as part of your total housing expense.

Here’s how these items factor into what you can afford.

If we estimate $260 per month for these additional fees, we can back into our qualifying payment of $1,400 per month by calculating 28 percent of your income.

$60,000/12 = $5,000 per month. $5,000 x .28% = $1,400.

As an example, a $190,000 home with a 5% down payment and an interest rate of 6.5% would mean your monthly mortgage payment might look like this:

• Principal & Interest: $1,140
• Taxes: $150
• Insurance: $60
• PMI: $50
• Total: $1,400/month

Maximum home purchase price by down payment

The size of your down payment directly impacts your home’s affordability. Below is an example of how varying down payment amounts affect the maximum purchase price based on an interest rate of 6.5%.

Larger down payments lower your loan balance and reduce and/or eliminate PMI, reducing monthly payments and increasing your purchasing power.

Maximum home purchase price by mortgage rate

Interest rates are another crucial factor in determining affordability. Here are examples of how different rates affect the maximum purchase price for a $60,000 salary and a 5% down payment.

When rates are lower, you can afford more house for the same monthly payment. Keeping an eye on market conditions can help you time your purchase strategically.

Maximum home purchase price by debt-to-income ratio

Your debt-to-income (DTI) ratio measures how much of your income goes toward debt payments. A lower DTI increases your borrowing capacity.

While the general rule of 28% is often used when calculating your housing ratio, many lenders will go up to 40%, some even higher.

Below is an example of how DTI impacts affordability with a 5% down payment.

Paying down existing debts can improve your DTI, increasing the amount you can afford.

Strategies to increase your home buying power

If you’re finding it difficult to find a home in your price range due affordability challenges, there are ways you to maximize your home-buying potential by strengthening a few key areas.

1. Boost Your Credit Score
   A higher credit score can help you qualify for lower interest rates, reducing your monthly payments and increasing your buying power. Steps to improve your score include:
   • Paying bills on time.
   • Reducing credit card balances.
   • Avoiding new debt or hard credit inquiries before applying for a mortgage.
2. Reduce Existing Debt
   Lowering your debt-to-income (DTI) ratio can significantly impact your mortgage approval amount. Pay down high-interest debts, like credit cards or personal loans, to free up more of your income for housing expenses.
3. Save for a Larger Down Payment
   Increasing your down payment reduces the loan amount you need, and potentially eliminates the need for private mortgage insurance (PMI). This lowers your monthly payment and may allow you to afford a more expensive home.
4. Explore Down Payment Assistance Programs
   Many states and local governments offer grants, low-interest loans, or forgivable loans for first-time homebuyers. These programs can help cover down payment and closing costs, reducing your out-of-pocket expenses and increasing affordability.
5. Consider a Co-Borrower
   Adding a co-borrower with a stable income, strong credit history, and low debt-to-income ratio can significantly increase the loan amount you qualify for, making it easier to afford a home that meets your needs.
6. Shop Around for Better Mortgage Rates

Interest rates vary by lender, so comparing offers can save you thousands over the life of your loan. Even a slightly lower rate can increase your affordability and allow you to qualify for a higher loan amount.

The bottom line

If you earn $60,000 annually, it may seem as though homeownership is out of reach. Fortunately, you may be able to afford nearly as much as a $300,000 house.

Start by evaluating your income, debts, and savings to establish a realistic budget. Use a home affordability calculator to determine how much house you can afford, and explore mortgage options from various lenders.

FAQ

How much house can I afford with a $60,000 salary?
With a $60K income, you can typically afford a home priced between $194,000 and $299,000, depending on factors like debt, credit score, and down payment.

What type of loan should I consider if I make $60,000 a year?
FHA and VA loans are known for allowing higher debt ratios, allowing for a higher loan amount. Don’t rule out other loans, such as conventional loans or down payment assistance programs.

What percentage of my income should I spend on housing if I make $60,000 a year?
Lenders recommend spending no more than 28% of your gross monthly income on housing costs, though some allow for higher debt ratios.

How does my credit score affect the house I can afford on a $60,000 salary?
A higher credit score qualifies you for better interest rates, allowing you to afford a more expensive home with the same monthly payment.