Income Needed for $300K Mortgage In 2025

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How Much Income Do You Need for a $300K Mortgage?

Most buyers would need an annual income of roughly $90,000 to comfortably afford a $300,000 mortgage in 2025, presuming they’re not saddled with other substantial debts.  

The 28/36 rule says to spend no more than 28% of your gross monthly income on housing costs — including insurance premiums, property taxes and mortgage payments — and no more than 36% of your gross monthly income on all combined debt.

Consider the following example.

• A $90,000 annual salary pays $7,500 per month.
• 28% of $7,500 leaves $2,100 per month for housing costs.
• Presuming a 20% down payment of $75,000 on a $375,000 property, a $300,000 30-year fixed-rate mortgage with a 6.38% interest rate would cost $1,872 per month. 
• Depending on your property taxes and homeowners insurance premiums, you might need a little more or less than $90,000 to comfortably manage a $300,000 home loan, but that’s the ballpark figure.

Factors That Impact Your Mortgage Affordability

The $90,000 example presumes several key variables, differences in any one of which could throw off the equation. 

Credit Score and Interest Rates

Your credit score determines the loan terms and interest rate. According to Experian data on current 2025 mortgage rates, that 6.38% interest could jump to 7.89% for borrowers who get approved with the lowest allowable credit score of 620.

A mortgage calculator shows how that borrower’s experience would differ from that of a highly qualified applicant earning the same $90,000 income and seeking the same $300,000 loan.  

Debt-to-Income Ratio

Debt-to-income (DTI) ratio is a crucial calculation that lenders use to assess risk — it’s the 36 part of the 28/36 rule. 

The buyer with the $90,000 annual salary can have up to $2,700 in combined monthly debt (36% of $7,500) to maintain a DTI ratio under 36%. With $2,100 allocated for housing, that leaves another $600 per month for car payments, personal loans, etc. 

However, 36% is just a recommendation. According to SoFi, some lenders will approve borrowers who have a combined DTI of up to 43%. 

Loan Type and Down Payment

The example also presumes a 20% down payment of $75,000 — a heavy lift for someone making $90,000 a year. 

If that borrower instead took out an FHA loan and put the minimum 3.5% down instead of 20%, the down payment would shave just $13,125 off the principal. Then, they’d have to borrow $361,875 instead of $300,000. Even with the lower 6.38% interest rate, the monthly payment for just the loan — insurance and taxes excluded — would be $2,258, putting the home out of reach.

Estimated Income Requirements Based on Interest Rates

To illustrate how dramatically even modest rate changes can impact monthly payments and the income required to make them, consider the following example of the same $300,000 mortgage.

Other Costs to Consider Beyond the Mortgage

The loan is the biggest, but not the only, piece of the home-buying puzzle. Consider the following associated expenses. 

Tips for Qualifying for a $300K Mortgage

Your credit score largely determines the interest rate you’ll pay regardless of your income. The most important components are your payment history and amounts owed, which make up 35% and 30% of your score, respectively.

No matter your earnings, work to get your credit score as high as possible before applying for a loan by making on-time payments and paying down debt to reduce the amount you owe and increase your open credit. 

If you can earn more money, you can increase your buying power. If not, save more money for a larger down payment to reduce the amount you’ll need to borrow.  

Common Mistakes to Avoid When Applying for a Mortgage

Applying for a mortgage can be a long, tedious and intrusive process. Ensure it goes as smoothly as possible by avoiding common and potentially costly mistakes. 

• Overestimating affordability: Don’t budget based on the amount the bank preapproves. Choose your price range based on the realities of your budget, allowing room to pay your mortgage while also saving money, managing your other debts and financing your lifestyle. A modest home you can pay off is always better than a luxurious one that goes into foreclosure.
• Ignoring hidden homeownership costs: Look past the purchase price and calculate the many associated costs, including, but not limited to, taxes, insurance, maintenance and repairs.
• Applying for new credit before closing: Lenders preapprove buyers based on their credit report at the time they apply. Months can pass between then and closing, when the bank will reassess your financials. Avoid all possible changes by not applying for new loans or credit and not taking on any new debt or running up your credit cards.

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