Many house hunters wonder how far their salary will go when it comes time to buy. A household earning $70,000 — about $10,000 below the median U.S. salary — could comfortably afford to spend about $257,000 on a house, assuming they put 20% down on a 30-year mortgage with a 6.5% rate.
But how much you have to spend is affected by other factors, such as private mortgage insurance, property taxes, and homeowners insurance. Therefore, the final figure may fluctuate depending on your location and financial situation.
Here’s how we calculated the amount of house you can afford on a $70,000 salary.
Start with the 30% rule
According to the U.S. Department of Housing and Urban Development, no more than 30% of a household’s gross monthly income should go toward housing expenses.
If your household income is $70,000, that means you can spend about $1,750 a month on housing. That includes your mortgage, but it also should factor in:
- Private mortgage insurance: If you put less than 20% down, you’ll have to get private mortgage insurance (PMI), which runs between 0.5% and 1.5% of your loan annually. On a $200,000 mortgage, that can be as much as $250 per month.
- Homeowners insurance: Most lenders require borrowers to have homeowners insurance. In 2024, the average plan cost $275 per month.
- Utilities: According to Move.org, U.S. households spend an average of about $380 a month on electricity, gas and water. If you add HOA fees, internet service, phone and other necessities, however, the figure is closer to $600.
- Property taxes: Property taxes vary by state, but the average is between 0.26% to 1.83% of a home’s value, according to the Tax Foundation.
To leave enough for these expenses, a household earning $70,000 per year can allocate between $1,000 and $1,300 per month on mortgage payments.
How big is your down payment?
Your monthly mortgage payment will vary based on the amount you put down up front. The larger the down payment, the smaller the loan and the monthly payments will be.
If you bring in $70,000 and put 20% down on a 30-year fixed-rate mortgage with a 6.5% interest rate, you could comfortably afford a home that costs $257,200.
Most first-time homebuyers put down much less than 20%, though. Below is a breakdown of how the size of a down payment affects what a homebuyer making $70,000 can afford.
| Down payment | Maximum home price | Monthly mortgage payment |
|---|---|---|
| 5% | $216,500 | $1,300 |
| 10% | $228,700 | $1,300 |
| 20% | $257,200 | $1,300 |
You also need to save up for closing expenses, which can be as much as 6% of the home cost, due when you sign your loan papers and get your keys. For a $ 250,000 house, closing costs could be as high as $15,000.
Plug your down payment, interest rate and home price into our mortgage calculator for a look at what your monthly mortgage might be.
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