Shopping for a $700k house is an enormous milestone however how a lot do you really want to earn to afford it? Whereas your down cost, credit score rating, and debt all play a task, the revenue wanted for a $700k mortgage is the largest think about figuring out whether or not this home matches your price range.
Whether or not you’re planning to purchase a home in Philadelphia, PA or a townhome in Chicago, IL, this Redfin information will stroll you thru what to anticipate and the best way to put together.
The quick reply
Most patrons must earn $175,000 to $235,000 per 12 months to afford a $700,000 dwelling.
This assumes common rates of interest, a normal mortgage time period, and a modest down cost.
Your precise revenue wants might differ primarily based in your debt, credit score rating, and month-to-month bills.
What’s the revenue wanted for a $700k home?
An excellent place to begin is the 28/36 rule, a standard customary utilized by mortgage lenders:
28% rule: Your month-to-month housing prices (together with mortgage, taxes, insurance coverage) must be not more than 28% of your gross month-to-month revenue.
36% rule: Your whole month-to-month debt (housing + bank cards, auto loans, scholar loans, and so forth.) ought to keep under 36% of your gross revenue.
For instance, in case your estimated month-to-month housing value is $4,000, you’d must earn round $175,000 per 12 months to remain inside these limits. That revenue requirement could also be increased in case you have further debt or dwell in an space with excessive property taxes or insurance coverage prices.
Calculator>> How A lot Home Can I Afford?
Pattern State of affairs: What $700k seems like in month-to-month prices
Let’s stroll by way of a primary instance.
Dwelling worth: $700,000
Down cost: 20% ($140,000)
Mortgage quantity: $630,000
Rate of interest: 7.00% (30-year fastened)
Estimated month-to-month mortgage cost (P&I): ~$3,726/month
Property taxes + owners insurance coverage: ~$1,009
Complete estimated month-to-month housing value: ~$4,735
On this case, a purchaser would seemingly must earn round $203,000 yearly to qualify comfortably. If in addition they had $1,000 in different month-to-month money owed (bank cards, automobile loans, and so forth.), their required revenue would seemingly rise.
Remember that placing down lower than 20% usually means including non-public mortgage insurance coverage (PMI), which bumps up your month-to-month cost and pushes the required revenue even increased.
Components that influence how a lot home you’ll be able to afford
The revenue wanted for a $700k mortgage isn’t nearly your wage. Listed here are six main components that affect your affordability:
1. Down cost
A bigger down cost lowers your mortgage quantity, reduces your month-to-month cost, and can assist you keep away from PMI.
20% down avoids PMI and saves on curiosity
10% down means the next month-to-month value
3% down may match for first-time patrons however comes with added charges
2. Credit score rating
Increased scores often unlock higher rates of interest, which may prevent tons of of {dollars} every month.
Learn>> How To Purchase A Home With Dangerous Credit score
3. Rate of interest
Only a 1% distinction in your mortgage charge can shift your month-to-month cost by tons of. For a mortgage this measurement, it issues. For instance, on a $700k dwelling with 10% down:
At 6.5%, your month-to-month cost could be $4,400
At 7.5%, it might bounce to $4,950
As of June 2025, the typical 30-year fastened charge is round 7%, which is increased than charges seen in prior years.
4. Debt-to-income ratio (DTI)
Lenders look carefully at how a lot of your revenue is already dedicated to different money owed. A decrease debt-to-income ratio (DTI) means extra borrowing energy.
5. Location-based prices
Property taxes and insurance coverage differ by area they usually’re included in your month-to-month housing prices.
For example, the distinction proven within the examples under might add tons of to your month-to-month prices:
In Westchester County, NY or Prepare dinner County, IL, annual property taxes on a $700k dwelling might exceed $10,000
In Maricopa County, AZ or Bexar County, TX, you would possibly pay nearer to $3,500 to $6,000
6. Ongoing obligations
Little one assist, alimony, and even HOA charges will probably be factored into your mortgage eligibility.
7. Financing
The mortgage sort (whether or not typical, FHA, VA, or one other mortgage) you select impacts your charge, down cost, and month-to-month value. Many states and cities supply down cost help or grant applications for first-time or income-qualified patrons, which can assist cut back upfront bills and make a $700k mortgage extra attainable.
What it takes to afford a $700k dwelling: Purchaser eventualities
Let’s evaluate three totally different purchaser profiles to see how variables like down cost, credit score rating, and debt have an effect on revenue necessities:
Purchaser ProfileDown PaymentCredit ScoreRateDebtMonthly Cost (PITI)Estimated Earnings
Conservative Buyer20% ($140,000)Glorious (760+)6.75%$300~$4,641~$199,000
Typical Buyer10% (70,000)Good (700-740)7.00%$600~$5,594~$240,000
Low Down Cost Buyer5% ($35,000)Truthful (660–680)7.25%$1000~$5,961 (incl. PMI)~$255,000
These numbers provide you with a ballpark thought, however your precise mortgage eligibility will rely in your particular monetary image.
Suggestions that will help you afford a $700k mortgage
If the numbers really feel simply out of attain, these methods can enhance your odds:
Enhance your credit score rating: Decrease rates of interest imply decrease funds.
Pay down debt: Decreasing your DTI expands your mortgage choices.
Improve your down cost: Even an additional 5% could make an enormous distinction.
Store round for lenders: Charges, charges, and mortgage applications differ.
Discover down cost help: Native applications would possibly assist bridge the hole, particularly for first-time homebuyers.
Add a co-borrower: A companion or partner with revenue can assist you qualify.
Work with an actual property agent: An agent can assist you keep on price range and negotiate higher offers.
Deal with financial savings: Increase your financial savings for a bigger down cost can decrease your month-to-month prices and make it simpler to qualify for a $700k mortgage.
Learn>> What You Have to Purchase a Home in 2025
FAQs: Your $700k mortgage questions answered
1. Can I afford a $700k mortgage on $150k revenue?
Most likely not, until your money owed are very low and you’ve got a large down cost. Most patrons want nearer to $170k-$200k yearly.
2. What if my credit score rating is beneath 700?
You possibly can nonetheless qualify, however you might face increased charges, which can elevate your required revenue.
3. Is it higher to place 10% or 20% down?
Placing 20% down avoids PMI and lowers your month-to-month value however 10% down should still be possibility if that’s what your price range permits.
4. Ought to I embody HOA charges when calculating affordability?
Completely. Lenders think about HOA charges as a part of your whole month-to-month housing expense.
5. How can I verify how a lot home I can afford?
Use a web-based mortgage calculator or converse to a lender for a personalised estimate.
6. The place can I discover $700,000 houses?Use Redfin’s dwelling search software to discover listings in your goal space. You possibly can set worth filters, view tax estimates, and get alerts for brand spanking new listings or worth drops.