How Much House Can I Afford on $120,000 a Year?

At $120,000 annual income, you can typically afford homes in the $445,000–$470,000 range with 20% down under the 28/36 rule. Your $10,000/month gross income supports a maximum housing payment of $3,000/month (30% DTI). This opens up meaningful options in many mid-tier and secondary high-cost markets.

With $120K income, your market access expands significantly. You can comfortably consider: Phoenix proper, Raleigh and Charlotte city limits, Nashville inner ring, Salt Lake City, Boise, the Denver outer metro (Colorado Springs, Thornton), Portland outer suburbs (Hillsboro, Beaverton), and Minneapolis-St. Paul primary suburbs. In these markets, $450,000–$475,000 buys a quality home in an established neighborhood.

The down payment on a $462,000 home at 20% is $92,400 — a substantial savings target. Many buyers at this income level use 10% down ($46,200) with PMI. At $120K income, PMI on a $415,800 loan runs about $175–$280/month depending on your credit score, which is manageable. The decision to save toward 20% vs. buy now depends on local price appreciation — if prices are rising faster than you can save, buying sooner makes sense.

At $120K income, you should start considering the second half of the 36 rule (back-end DTI). With $10,000/month gross income, back-end limit is $4,000/month total debt. If you have a $600/month car payment and $200/month student loan, your remaining housing budget is $3,200/month — still above the front-end limit. But large debts at high incomes can still constrain buying power.