How Much Do You Need to Earn to Afford a Million-Dollar Home?
Dec 20, 2023
Despite increasing inflationary measures and the lack of new homes being built, demand for luxury homes has remained hot in the U.S.
It would be nice to have a wad of cash or an inheritance to pay cash for a million-dollar home. But if you’re looking to go through the mortgage route to purchase your home, you’ll need to be bringing home a sizable salary.
Assuming you’re able to come up with a 20% down payment for a $1 million home purchase ($200,000 down payment amount), you could be looking at a monthly mortgage payment of about $5,000 - and let’s consider a 6.5% interest rate.
Based on a standard budgeting guideline that says you shouldn’t spend more than 30% of your income on housing, you’d need to be making around $15,000 per month - which is equivalent to at least $180,000 annually to afford your million-dollar home.