Can I afford a $400k house on a $100k salary?

On a $100k salary, a $400k house with 10% down costs $2,952 a month — principal and interest, property tax, insurance and PMI — which is 43% of take-home pay after federal tax and FICA in Texas. In this projection the engine funds the $40,000 down payment from savings and the first year’s surplus, and the plan funds itself to 95 from age 61 buying, against 62 renting the same home and investing the difference.

The monthly cost of a $400k house on $100k

First-year figures from the projection, in today’s dollars. Take-home is salary less federal income tax, no state income tax in Texas, and Social Security and Medicare tax; mortgage interest and property tax are only deducted when itemizing beats the standard deduction, which the engine checks each year.

Living costs of $2,917/mo on top leave $942/mo to invest in year one. PMI ($180/mo) falls away at age 39, when the balance reaches 80% of the home’s value.

Retirement: buying vs renting and investing

The same household either buys at 32 or rents the equivalent home for $2,000/mo and invests the $40,000 it did not put down, plus any month renting is cheaper. The mortgage’s principal and interest are fixed and end at 62; rent rises with inflation for life. Property tax and insurance rise with inflation too, and stay after the loan is gone.

The same $400k house on every salary

Each row is its own pair of projections at the same $400k price: affordable at $150k–$200k; tight at $80k–$100k; the down payment can’t be funded at $60k. Retirement ages are buy / rent-and-invest.

The full price ladder for this salary is on how much house can I afford on $100k; the 30-year net-worth race between the two paths is on rent vs buy a $400k house.

What the chips mean

Three outcomes, two of them the engine’s own. Can’t fund is the calculator’s affordability rule verbatim: the down payment is funded in order from the year’s surplus, then cash savings, then selling brokerage shares (with the capital-gains tax that triggers), and if more than $1,000 is still short the engine books it as cash debt rather than granting free equity — the same condition that raises the red “you can’t afford this home purchase” banner in the app. It also covers a plan that funds the purchase but has to borrow in a later working year to carry it. Affordable means the purchase is funded and the whole housing stack — principal and interest, property tax, insurance and PMI — is 35% of take-home pay or less. Tight means it is funded but takes more than 35%. That 35% line is the one number on this page that is a convention rather than an engine result; everything else is the projection.

The retirement age is the earliest age from which retiring funds every year to 95 with no shortfall and no borrowing — the same test the rest of this site uses. Home equity counts toward net worth but not toward that test, which only asks whether the accounts can deliver each year’s spending.

Assumptions: single filer in Texas, age 32, salary rising 3%/yr, non-housing living costs at 35% of salary ($35,000/yr), savings of $50,000 in a brokerage account at the start, every surplus dollar invested at 7% nominal, 3% inflation. The house: 10% down, 6.5% 30-year mortgage, 1.1% property tax, $130/mo insurance, 3% appreciation, PMI at 0.6% of the loan until the balance reaches 80% of value. The renter pays $2,000/mo (0.5% of the price), rising with inflation for life, and invests the down payment. No Social Security, no employer match, no children — each of those moves the answer, which is what the calculator is for.

Common questions

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