What Annual Salary You'll Actually Need For Your Dream Million-Dollar Home

Owning a million-dollar property isn’t just about having a down payment saved up—it requires a specific income threshold to comfortably handle monthly payments. Let’s break down exactly what salary to afford a $1 million dollar home, and how that stacks up against smaller properties.

The Income Requirements for Premium Properties

The $1 Million House: The Real Numbers

A million-dollar home is an aspirational purchase for many, but the math is straightforward. If you’re putting down 20% ($200,000), you’re looking at a $5,339 monthly mortgage on a 30-year fixed loan at 7.03% APR. Using the standard 28% rule—which dictates that housing shouldn’t exceed 28% of your gross income—you’d need to earn $19,068 monthly, or roughly $229,000 annually.

Can’t swing that 20% down? With a 10% down payment ($100,000), your monthly obligation jumps to $6,006, plus $469 in private mortgage insurance. That requires an annual income of $257,400 before including PMI costs, or $277,500 if you factor it in.

The $500K and $250K Properties: Easier Entry Points

For those stepping into the housing market with a $500,000 purchase, a 20% down payment means a $2,669 monthly mortgage. You’d need an annual income of $114,384. With 10% down, that requirement climbs to $138,732 yearly.

A $250,000 home is far more accessible. At 20% down ($50,000), your monthly payment hits $1,335, requiring just $57,216 in annual income. The 10% down scenario ($25,000) bumps this to $69,348 yearly when including PMI.

Why Interest Rates Matter More Than You Think

These calculations assume a 7.03% APR, but here’s the game-changer: interest rates directly impact affordability. Lower your APR to 6.50% on that million-dollar property, and your monthly payment drops from $5,339 to $5,057—suddenly more manageable on a lower salary.

Your credit score is the lever you control here. Better payment history and lower debt load translate to better rates, which compounds into significant savings over 30 years.

Strategies to Unlock Larger Properties

If the numbers don’t align with your current income, you have realistic options:

Adjust Your Threshold. The 28% rule is conservative. Moving to a 30-35% housing-to-income ratio stretches your buying power, though it requires disciplined budgeting throughout the mortgage life.

Boost Your Earnings. This is the most sustainable path—whether through promotions, job changes, or developing additional income streams. Higher earnings don’t just increase what you can borrow; they improve your debt-to-income ratio in lenders’ eyes.

Maximize Your Down Payment. Each percentage point you add reduces your monthly obligation and eliminates PMI sooner. A 15% down payment splits the difference between accessibility and payment relief.

Secure a Better Rate. Beyond credit improvements, shopping between lenders can yield 0.25-0.5% differences, translating to thousands in monthly savings over time.

The Practical Reality

When determining what salary to afford a $1 million dollar home—or any property—remember you’re not just qualifying for the mortgage. You’re confirming you can handle it alongside property taxes, insurance, maintenance, utilities, and daily living expenses. The 28% rule exists because lenders know from data that this threshold separates sustainable purchases from financial stress.

Starting smaller—say, a $250K or $500K property—builds equity faster while keeping your housing costs reasonable, letting you upgrade as your income and savings grow.