How much house can I afford with a 90k salary? With examples

Want to know the answer to the question, "how much house can I afford with a 90k salary?" You're in the right place.

Homebuyers with an income of $90k should generally be able to afford a home in the $275,000 to $360,000 range.  

However, there's no guarantee. Lenders will consider your income when determining the mortgage you qualify for, but other factors, like your credit score and total debt, will impact whether you'll be approved for a home loan and how much loan you can borrow. Find out more. 

How much house can I buy on a 90k salary?

Before you begin looking at homes, it's a good idea to set a homebuying budget so you can feel confident you can afford the home you're buying. 

Is 90k a good salary to afford a home? With an annual salary of $90k, your income is slightly above the median U.S. salary. Generally, someone earning a $90k salary, with excellent credit and minimal debt, who makes a 20% down payment can afford a $350,000 home.  

As you consider how much house you can buy with your salary, you should consider additional costs beyond the home loan principal and interest. Homeowners insurance premiums, property taxes, and utilities are some other expenses to factor into your budget. 

Just remember, no set price range works for every buyer, as factors like credit score, down payment amount, and DTI ratio can affect home affordability and loan options. 

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Mortgage budgeting rules

Ready to budget for your monthly mortgage payment? 

To determine a realistic homebuying budget, it can be helpful to look at standard guidelines for what percentage of your income should go to mortgage and housing costs. 

Here are two popular guidelines that lenders follow: 

28/36 rule

No more than 28% of your gross monthly income should be spent on monthly housing costs.

No more than 36% of your gross monthly income should go toward debt payment (housing, credit cards, auto loans, etc.).

What that means: If you earn $90k per year, your gross monthly income is $7,500. That means your monthly housing payments should be no more than 28% of that, or $2,100. Your total monthly debt payments (including your mortgage) should be no more than 36%, or $2,700.

30% rule

Another guideline is the 30% rule. According to the U.S. Department of Housing and Urban Development, homebuyers shouldn’t spend more than 30% of their income on housing costs. This includes mortgage payments, homeowner insurance, property taxes, and utilities.

What that means: With a gross monthly income of $7,500, you should aim to keep your total monthly housing costs under $2,250. 

Related: Estimate your monthly mortgage payments 

What factors affect home affordability

Your income is one factor that influences how much home you can afford and whether you'll be approved for a mortgage. Here are a few other factors that affect home affordability: 

– Credit score: If you'll be financing your home purchase, your credit score can impact home affordability. Buyers with higher credit scores are more likely to be approved for a home loan with better terms. If you have excellent credit, you may qualify for a home loan with a lower interest rate and have more lenders to choose from.

– Debt-to-income (DTI) ratio: Your DTI ratio compares your gross monthly income to your monthly debt repayments. Lenders consider your DTI ratio when determining whether you can afford to prepay your mortgage. 

– Down payment amount: The size of your down payment also impacts housing affordability. If you make a 20% down payment, you won't have to pay for private mortgage insurance (PMI). A sizable down payment can also make your mortgage payments more affordable, since you'll need to borrow less money. 

– Current interest rates: The interest rate on your mortgage will affect your monthly payment. A higher interest rate increases your monthly payment amount, while a lower interest rate decreases it. Check out today’s mortgage rates. 

– Home location: Location can impact home affordability. In some high-cost-of-living areas, homes are much more expensive. Other homeownership costs can also be higher in some parts of the country. For example, homeowners insurance and property taxes can be significantly higher in areas with a lower cost of living. 

– Home condition: Some homes are in excellent condition. But that’s not always the case. If you’re buying a home that needs minor updates or significant work, you should consider the cost of these renovations. Make sure you do a home inspection before you close on a home so you don’t end up with serious, costly issues, like structural problems. 

Related: How to lower DTI ratio when applying for a mortgage 

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Mortgage loan options for a 90K salary

Here are a few mortgage loan options for buyers with a $90k salary: 

– Conventional loans: This is the most common type of mortgage. Conventional home loans typically require a minimum down payment of 3% to 5% and a minimum credit score of 620. If you make a down payment of less than 20%, you'll need to pay PMI. 

– FHA loans: This is a great option to explore if you need flexibility with credit score and down payment requirements. The Federal Housing Administration insures FHA loans. These loans have lower minimum credit scores and down payment requirements than conventional loans.

– VA loans: For military members, veterans, and surviving spouses, a VA loan can improve home affordability. The U.S. Department of Veterans Affairs backs VA loans. They don't require a down payment or mortgage insurance fees.

Unsure which home loan is right for you? Better offers quick online pre-approval and rate comparison tools to help you decide which mortgage solution is ideal for your needs. 

Related: How to get pre-approved for a mortgage 

90K salary affordability scenarios

For those wondering what house can I afford on 90k a year, it can be helpful to look at some scenarios. Here are a few realistic scenarios for buying a home on a $90,000 salary:

Scenario 1: $360,000 house

• Loan amount: $288,000
• Down Payment: $73,000 (20%)
• Credit Score: 805
• 30-year fixed mortgage interest rate: 6.19%
• Existing monthly debts: $500
• Monthly Mortgage Payment (Principal and Interest): $1,762

In this scenario, the principal and interest total $1,762 per month. With a $2,100 budget, you'd have an additional $338 per month to put toward taxes and homeowners insurance.

Scenario 2: $300,000 house

• Loan amount: $270,000
• Down Payment: $30,000 (10%)
• Credit Score: 790
• 30-year fixed mortgage interest rate: 6.25%
• Existing monthly debts: $340
• Monthly Mortgage Payment (Principal and Interest): $1,662
• Monthly PMI: $240

In this scenario, the mortgage principal and interest come to $1,662, or $1,902 with PMI. This gives you an additional $198 per month to put toward taxes and homeowners insurance.

Scenario 3: $275,000 house

• Loan amount: $261,250
• Down Payment: $13,750 (5%)
• Credit Score: 720
• 30-year fixed mortgage interest rate: 6.55%
• Existing monthly debts: $600
• Monthly Mortgage Payment (Principal and Interest): $1,660
• Monthly PMI: $215

In this scenario, the mortgage principal and interest come to $1,660, or $1,875 with PMI. This gives you an additional $225 per month to put toward taxes and homeowners insurance.

Tips to increase home affordability with a $90k salary

These tips may help you qualify for a lower monthly mortgage payment or raise your max loan amount so you can stretch your 90k salary and compete in a tight housing market: 

– Improve your credit score: Taking steps to improve your credit score could help you qualify for a home loan with a lower interest rate. Getting approved for a mortgage with better terms could enable you to afford more house on a 90k salary.  
– Pay down your debt: Reducing your debt could lower your DTI ratio. This may help you expand your mortgage options and qualify for a lower-rate home loan.  

– Consider a less expensive area: If you have the flexibility and are open to moving, consider whether buying a home in a different part of the county could help you improve home affordability. Homes and housing expenses could be cheaper elsewhere, which could be more ideal for a 90k salary mortgage.  

– First-time homebuyer programs: These programs can help reduce homebuying expenses for first-time buyers, such as down payments and closing costs. If you're buying your first home, check whether you qualify for any programs. 

– Consider down payment assistance programs: A larger down payment can reduce the amount of money you need to borrow and lower your monthly mortgage payment. If you're struggling to save enough for a down payment, you may want to check whether you qualify for down payment assistance programs.

90K salary for a mortgage FAQs

Here are some answers to commonly asked questions related to what house can I afford with a 90k salary: 

What additional costs should I consider when buying a house?

Be sure to consider upfront homebuying expenses, like a down payment and closing costs. You should also budget for ongoing expenses, like property taxes, homeowners insurance, and home maintenance and repairs. 

Can I qualify for a conventional loan with a $90,000 salary?

You likely qualify for a conventional loan with a $90,000 salary. Lenders will consider other factors beyond your gross monthly income. To be approved for a conventional mortgage, you generally need a credit score of at least 620 and a DTI ratio below 36%. 

Your income is one part of the equation for home affordability

Now you know the answer to the question: how much house can I afford with a 90k salary? You can likely afford a home in the $275,000 to $360,000 range. To determine approval for a home loan, lenders will also consider your credit score and DTI ratio. 

As you begin to look at potential homes to buy, don’t forget to consider costs beyond your mortgage payment, like homeowners insurance, property taxes, and home maintenance. 

Still need a lender? Better is a digital lender that could provide pre-approval in minutes. 

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