How much house can I afford on $120,000 a year?
A home up to about
$416,100
On $120,000 a year, you could afford a home up to about $416,100 with a 20% down payment of $83,220. The mortgage payment would be about $2,269 a month, or $2,800 with property tax and home insurance.
- Down payment
- $83,220
- Mortgage
- $332,880
- Payment a month
- $2,269
What it costs each month
| Mortgage payment | $2,269 |
| Property tax | $381 |
| Home insurance | $150 |
| Total | $2,800 |
|---|
How your down payment changes it
| Saved for a down payment | Home up to | Mortgage | Payment a month |
|---|---|---|---|
| $17,017 (5%) | $340,323 | $323,306 | $2,203 |
| $35,690 (10%) | $356,895 | $321,205 | $2,189 |
| $83,220 (20%) | $416,100 | $332,880 | $2,269 |
How it’s worked out
Lenders usually keep housing costs (mortgage, property tax, insurance and PMI) under 28% of your gross income, and all your debt payments under 36%. On $120,000, that's $2,800 a month for housing.
Assumes no other debts, 1.1% property tax, $1,800 a year home insurance and 0.5% PMI below 20% down, using the 28/36 guideline. Freddie Mac’s average 30-year fixed rate was 7.24% on 29 October 2026.
- Uses the 28/36 guideline: housing costs (mortgage, property tax, insurance, PMI and HOA fees) up to 28% of gross income, and all debt payments up to 36%. Lenders can approve higher ratios, so this is a comfortable limit rather than the most you could be lent.
- Assumes all your savings go towards the down payment. Closing costs, usually a few percent of the price, are extra.
- PMI is charged while your down payment is under 20%.
Frequently asked questions
How much house can I afford on $120,000 a year?
On $120,000 a year, you could afford a home up to about $416,100 with a 20% down payment of $83,220. The mortgage payment would be about $2,269 a month, or $2,800 with property tax and home insurance.
How much down payment do I need on $120,000?
With $17,017 saved, you could buy a home up to about $340,323. With $35,690 saved, you could buy a home up to about $356,895. With $83,220 saved, you could buy a home up to about $416,100.