How much income is needed to afford a $500,000 mortgage (including the down payment)?

Core Insights - The article discusses the financial requirements and considerations for qualifying for a $500,000 mortgage, emphasizing the importance of income in determining home-buying prospects [1][5]. Mortgage Costs - The estimated monthly payment for a $500,000 mortgage, including principal, interest, taxes, and insurance, is approximately $3,669 based on national averages [2][14]. - The down payment for a $500,000 mortgage can vary, with a median down payment of 19% in 2025, equating to $95,000 [3]. - Closing costs typically range from 2% to 5% of the loan amount, resulting in costs between $10,000 and $25,000 for a $500,000 mortgage [4]. Income Requirements - The article outlines three commonly used rules to estimate the income needed for a $500,000 mortgage: the 28/36 rule, the 35/45 rule, and the 25% rule [5][6]. 28/36 Rule - Under the 28/36 rule, the front-end ratio should be 28% or less of monthly pre-tax income, while the back-end ratio should be 36% or lower. To afford a $500,000 mortgage, an estimated monthly income of about $13,100 or an annual income of $157,200 is required [7][8]. 35/45 Rule - The 35/45 rule focuses on the back-end ratio, requiring it to be 35% or less of pre-tax income and 45% or less of post-tax income. For a $500,000 mortgage, a monthly pre-tax income of just under $10,500 or an annual income of $126,000 is needed [9][10]. 25% Rule - The 25% rule considers only the front-end ratio based on post-tax income, requiring a monthly post-tax income of nearly $14,700 to afford a $500,000 mortgage [12]. Summary of Income Estimates - To afford a $500,000 mortgage, the required annual pre-tax salary ranges between $126,000 and $176,000, depending on the specific financial circumstances and mortgage type [18].