Can I Afford a House on a $100K Salary?
On a $100,000 salary, you can afford a home in the $300,000 to $430,000 range with a max housing payment of about $2,333/month. Here's how to optimize your purchase.
The Quick Answer
On a $100,000 salary, you can likely afford a home in the $350,000 to $450,000 range. At this income level, you have access to competitive loan products and can comfortably handle a substantial mortgage.
Your Numbers at a Glance
| Metric | Amount |
|---|---|
| Gross Annual Income | $100,000 |
| Gross Monthly Income | $8,333 |
| Max Housing Payment (28% DTI) | $2,333/mo |
| Max Home Price (28% front-end DTI) | $375,000 |
| Max Home Price (36% back-end DTI) | $450,000 |
| Down Payment at 5% | $18,750 |
| Down Payment at 10% | $37,500 |
| Down Payment at 20% | $75,000 |
The $100K Advantage
At $100K, your 28% housing budget is $2,333 per month. This opens up a wide range of homes in most markets. You're also more likely to qualify for the best interest rates, which can save tens of thousands over the life of your loan.
Should You Buy More House or Invest the Difference?
This is the key question at $100K. You could:
- Buy a $375K home and invest the monthly savings. If you can afford $2,333/mo but your payment is $1,900, that's $433/mo into investments.
- Buy a $425K home and build equity in a more valuable asset. Real estate appreciation on a $425K home is more impactful than on a $375K home.
- Buy a $350K home and pay it off aggressively. Extra payments on a smaller mortgage can save you 10+ years and $100K+ in interest.
Points and Rate Buydowns
At this price range, buying points starts to make real financial sense. On a $375K home:
| Strategy | Upfront Cost | Monthly Savings | Break-Even |
|---|---|---|---|
| Par rate (6.75%) | $0 | — | — |
| 1 point (6.5%) | $3,375 | $52/mo | 65 months |
| 2 points (6.25%) | $6,750 | $104/mo | 65 months |
If you plan to stay 7+ years, buying points is usually worth it. If you might move or refinance sooner, keep your cash.
The Bottom Line
$100K gives you excellent buying power and flexibility. The biggest risk at this level isn't qualifying — it's overbuying. Stick to a payment that leaves room for savings, investments, and life.
Run the Numbers
Try these calculators to apply what you learned