You know how it goes. You type in a question like, “How much house can I afford with a $70,000 salary,” and the internet gives you an if-then answer. Or a “between this and that.” Or, “Here’s how to do the math.”
How about a straight answer? That’d be nice, huh? An answer that considers some variables and does the math for you. Built by humans who know a thing or two on the subject. That would give AI a run for its money, right?
How much house can you afford with a $70,000 salary? Here we go.
About three times what you earn.
For example, with a $70,000 annual income, you will likely be able to afford a $210,000 house.
That’s the starting point. However, what you can afford is going to depend on your credit score, your down payment, the debt you carry, and your employment situation. But you wanted a clear answer without all the fine print, and you got it.
For a more exact view, including your existing debt, down payment, and monthly payment information, put your salary in the Yahoo Finance “How much house can I afford?” calculator.
Here’s a sample result: With a $70,000 annual income and $275 in monthly debt payments, you could afford a home with a sales price of right around $210,000 with a 10% down payment. That’s right on target with our three-times income estimate.
For a 30-year mortgage with a 6.5% interest rate, principal and interest payments would amount to $1,200 monthly.
Let’s take that sample to the next step.
Learn more: PITI (principal, interest, taxes, insurance) — How it affects your mortgage payments
Affording a home is greatly impacted by how much it costs to live where you move. Want to make that $210,000 go further? See how your housing costs are affected by the cost of living.
With a tool like a cost-of-living calculator, you can see how much your home-buying options are impacted by where you live. For example, moving from Denver to Dallas would lower your housing costs by more than 20%.
Not only will you get about 20% more house in Dallas than Denver, but from a cost-of-living standpoint (Dallas has an overall cost of living that’s 6.2% cheaper than Denver), you’ll feel like you have over $4,000 more in your pocket each year with that $70,000 salary.
Let’s look at a different part of the country — maybe you want to buy a house in the Nashville area. Nashville housing may not be in your price range — But Hendersonville, Tenn., might be. The cost of living in Hendersonville is over 17% lower — and housing is 37% cheaper. And it’s just a half-hour drive on I-65 from downtown Nashville.
Using a cost-of-living calculator, you can play out a lot of different scenarios, including seeing how moving from one city to another inside the same state can drastically impact your home-buying power.
Sometimes, only a 30-minute commute can mean more house for your money.
And with a solid home purchase budget in mind, you can shop for a house with confidence, knowing just how much you can afford on a $70,000 salary.
Read more: How to save for a house in 7 easy steps
This article was edited by Laura Grace Tarpley.
