Table of Content
- What job makes the most money?
- Minimum Income Necessary To Afford A $2 Million House
- How Much Should You Make To Afford A Two Million Dollar House?
- First Time? Check out our First Time Home Buyers Survival Guide
- Extra-large down payment: $110,000 income needed
- How much house can I afford on 120k salary?
- How do people afford a $1m mortgage?
The good news is that you don’t need to be a millionaire to afford one. But you should have your personal finances in order to ensure you get the best rate. Buy your dream home with a top local realtor from a trusted brand like Keller Williams or RE/MAX. Keep more money in your pocket by earning cash back on eligible purchases. I should know, because I bought a house in San Francisco for $1,525,000 back in 2005 and sold it for $2,740,000 in 2017. The house was too big and costly for just my wife and I at the time.

They are a bit more lenient when they consider these other expenses and look for ratios near 40% (32% + 8% to cover all the costs). While spending $2 million for a home may sound astronomical for some people, it’s close to the median sales price in areas like New York, San Jose, or San Francisco. Even if you don’t live in one of these areas, perhaps you’re doing well for yourself and want to finally purchase your dream home. Here is a look at what kind of salary, down payment, and monthly mortgage payment is needed to afford a $2 million home. Typically, someone would need to figure out how much loan can I get?
What job makes the most money?
But at the time, I just couldn’t take the maintenance and tenant issues. Further, I reinvested the proceeds into stocks, muni bonds, and real estate crowdfunding, which have done well. Therefore,, if you want to buy a three million dollar house, then you should earn $1 million a year. In addition, you should have at least a $600,000 down payment and ideally a $300,000 buffer post down payment.
This puts their total gross income figure at $600,000, or bang in line with my minimum income recommendation. That said, purchasing a $1 million house might be a poor financial decision if you can't afford a down payment of at least 20%. The most effective way to lower your mortgage payment is to choose loan options that reduce the amount of principal and interest you pay each month. However, lowering your monthly payment may actually increase the total cost of your mortgage.
Minimum Income Necessary To Afford A $2 Million House
Below is a real budget for a family of three living in an expensive city earning $350,000 a year. Their house costs $1.8 million and they have a very affordable $900,000 mortgage at 3.15%. In other words, you can make as little as $400,000 to buy a $2 million home. However, you will feel stressed and a little paranoid during the initial year if you don’t have a large leftover cash buffer. They and the other buyers are still communicating individually with Paradise and hoping the builder will extend their closing dates or reduce the prices.

To afford a million-dollar home, you'll need a minimum annual income of $225,384. This allows you to pay for ongoing costs, including monthly mortgage payments, maintenance, insurance, and homeowners association fees and taxes. You'll also need $224,223 in cash to cover upfront expenses, including a down payment and closing costs. If you make a 20% down payment ($200,000), and have few monthly expenses, you can likely secure a mortgage with a good interest rate (say, a 30-year fixed-rate mortgage at 2.75%). This would bring your monthly mortgage payment to about $4,100, before things like property taxes and homeowners insurance are factored in. As a general rule, you'll need an annual household income of at least $225,384 to afford the monthly mortgage payments on a million-dollar home.
How Much Should You Make To Afford A Two Million Dollar House?
Or more specifically — to get the loan you'll need to buy that million-dollar house. However, this can be a complicated adjustment, and finding renters and managing a rental property can be a hassle. However, three million dollars still doesn’t buy you a mansion in cities such as San Francisco, San Jose, Los Angeles, Seattle, and New York. You can get a nice house for $3 million in the expensive coastal cities.
The monthly mortgage payment would be approximately $2,089 in this scenario. Most experts agree that you should not spend more than 28% of your monthly income on mortgage payments. So, with a 30-year adjustable-rate mortgage at 3.5%, you should be able to show an annual household income of around 386,000. The national average for a 30-year fixed-rate jumbo loan mortgage is around 3.5%.
Homeowners association (HOA) fees
If you’re wondering how to buy your first home, you should read this article first. Your monthly payment, with the interest rate included, would come out to about $3,917. However, it's important to realize that almost $1,500 of that payment will go towards your principal.

Split the difference between the recommended 3X and the maximum 5X income multiple. In other words, try to consistently earn at least $500,000 in household income before buying a $2 million house. So bottom line, if you are planning on purchasing a $2 million home, you should have ample cash saved up to pay for the various related expenses.
If you make $120,000 a year, you can go up to $33,600 a year, or $2,800 a month—as long as your other debts don't push you beyond the 36 percent mark. So it’s worth looking into financing sooner rather than later if you’re serious about buying a $1 million home. And do all you can to shore up your credit score and savings before applying. Home buyers also need to consider their future property taxes. Chances are, in your happy financial position, you’ve paid down most of your total debt, so we’ll return that number to $250 in monthly debt repayment.
Your debt-to-income ratio is calculated based on your gross monthly income that must go towards any debt payments, including car loans, mortgage, credit cards, student loans, etc. There’s no set-in-stone standard for jumbo loans when it comes to your DTI, but it’s typically in the 36-43% range. Let’s imagine you want a 1 million dollar home and can afford a 20% down payment. Based on current interest rates, your monthly payments would likely land up around $4,500 (mortgage + property tax + heating costs). To afford a house that costs $600,000 with a 20 percent down payment (equal to $120,000), you will need to earn just under $90,000 per year before tax.