Shopping for a $700k house is an enormous milestone however how a lot do you actually need to earn to afford it? Whereas your down fee, credit score rating, and debt all play a task, the revenue wanted for a $700k mortgage is the most important consider figuring out whether or not this home suits 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 how one can put together.
The quick reply
Most patrons must earn $175,000 to $235,000 per yr to afford a $700,000 dwelling.
This assumes common rates of interest, a typical mortgage time period, and a modest down fee.
Your precise revenue wants could differ primarily based in your debt, credit score rating, and month-to-month bills.
What’s the revenue wanted for a $700k home?
A superb start line is the 28/36 rule, a standard normal utilized by mortgage lenders:
28% rule: Your month-to-month housing prices (together with mortgage, taxes, insurance coverage) needs to be not more than 28% of your gross month-to-month revenue.
36% rule: Your complete month-to-month debt (housing + bank cards, auto loans, scholar loans, and so forth.) ought to keep beneath 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 yr to remain inside these limits. That revenue requirement could also be greater you probably 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 Situation: What $700k seems to be like in month-to-month prices
Let’s stroll by a fundamental instance.
House value: $700,000
Down fee: 20% ($140,000)
Mortgage quantity: $630,000
Rate of interest: 7.00% (30-year fastened)
Estimated month-to-month mortgage fee (P&I): ~$3,726/month
Property taxes + householders insurance coverage: ~$1,009
Whole estimated month-to-month housing value: ~$4,735
On this case, a purchaser would possible must earn round $203,000 yearly to qualify comfortably. If additionally they had $1,000 in different month-to-month money owed (bank cards, automotive loans, and so forth.), their required revenue would possible rise.
Take into account that placing down lower than 20% typically means including non-public mortgage insurance coverage (PMI), which bumps up your month-to-month fee and pushes the required revenue even greater.
Elements that impression how a lot home you possibly can afford
The revenue wanted for a $700k mortgage isn’t nearly your wage. Listed here are six main elements that affect your affordability:
1. Down fee
A bigger down fee lowers your mortgage quantity, reduces your month-to-month fee, and may also help 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 go for first-time patrons however comes with added charges
2. Credit score rating
Increased scores normally unlock higher rates of interest, which may prevent a whole lot 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 price can shift your month-to-month fee by a whole lot. For a mortgage this measurement, it issues. For instance, on a $700k dwelling with 10% down:
At 6.5%, your month-to-month fee is likely to be $4,400
At 7.5%, it might bounce to $4,950
As of June 2025, the typical 30-year fastened price is round 7%, which is greater than charges seen in prior years.
4. Debt-to-income ratio (DTI)
Lenders look intently 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.
As an illustration, the distinction proven within the examples beneath might add a whole lot to your month-to-month prices:
In Westchester County, NY or Cook dinner County, IL, annual property taxes on a $700k dwelling might exceed $10,000
In Maricopa County, AZ or Bexar County, TX, you may pay nearer to $3,500 to $6,000
6. Ongoing obligations
Youngster help, alimony, and even HOA charges will likely be factored into your mortgage eligibility.
7. Financing
The mortgage sort (whether or not standard, FHA, VA, or one other mortgage) you select impacts your price, down fee, and month-to-month value. Many states and cities provide down fee help or grant packages for first-time or income-qualified patrons, which may also help scale back upfront bills and make a $700k mortgage extra attainable.
What it takes to afford a $700k dwelling: Purchaser situations
Let’s examine three totally different purchaser profiles to see how variables like down fee, credit score rating, and debt have an effect on revenue necessities:
Purchaser ProfileDown PaymentCredit ScoreRateDebtMonthly Fee (PITI)Estimated Revenue
Conservative Buyer20% ($140,000)Wonderful (760+)6.75%$300~$4,641~$199,000
Typical Buyer10% (70,000)Good (700-740)7.00%$600~$5,594~$240,000
Low Down Fee Buyer5% ($35,000)Honest (660–680)7.25%$1000~$5,961 (incl. PMI)~$255,000
These numbers offer you a ballpark thought, however your precise mortgage eligibility will rely in your particular monetary image.
Ideas 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 fee: Even an additional 5% could make an enormous distinction.
Store round for lenders: Charges, charges, and mortgage packages differ.
Discover down fee help: Native packages may assist bridge the hole, particularly for first-time homebuyers.
Add a co-borrower: A companion or partner with revenue may also help you qualify.
Work with an actual property agent: An agent may also help you keep on price range and negotiate higher offers.
Deal with financial savings: Build up your financial savings for a bigger down fee 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?
In all probability not, until your money owed are very low and you’ve got a large down fee. Most patrons want nearer to $170k-$200k yearly.
2. What if my credit score rating is below 700?
You possibly can nonetheless qualify, however it’s possible you’ll face greater charges, which is able to 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 be choice if that’s what your price range permits.
4. Ought to I embody HOA charges when calculating affordability?
Completely. Lenders consider HOA charges as a part of your complete month-to-month housing expense.
5. How can I verify how a lot home I can afford?
Use an internet mortgage calculator or converse to a lender for a customized 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 value filters, view tax estimates, and get alerts for brand new listings or value drops.
