What Income Do You Need For A $800,000 Mortgage (Answered)

So, what income do you need for a $800,000 mortgage?

What salary do you need to get 800K?

What’s essential to know?

Keep reading as I have gathered exactly the information that you need!

Follow me to see how I calculate the income required for 800K mortgage!

Are you ready?

Let’s get started!

What Income Do You Need For A $800,000 Mortgage 

If you are looking to get an $800,000 mortgage, it means that you are looking to buy a house worth at least $800,000 or more.

In other words, if you are buying a home worth $800,000 and you plan on leaving no cash down payment, then you’ll need an $800,000 mortgage.

However, if you are buying a more expensive home, say $900,000, and need an $800,000 mortgage, you’ll need to leave a cash down payment of $100,000.

Although everyone’s credit history and circumstances are different and we cannot give a general answer applicable to all, let me calculate for you how much income you need to get yourself an 800K mortgage depending on the purchase price of your house.

House Purchase Price of $800,000

If you are looking to buy a house leaving no cash down payment where you’ll finance the entire purchase price with an $800,000 mortgage, you’ll need an income of $149,214 per year before taxes.

Your monthly payment to pay your mortgage comes out to $3,482.

This figure assumes the following:

  • No cash down payment
  • 3.25% interest rate
  • 30 year mortgage term

House Purchase Price of $900,000

If you are going to purchase a house worth $900,000 and leave a $100,000 cash down payment where you’ll need a mortgage for an 800K financing, you’ll need an income of $149,214 per year before taxes.

You will have to pay $3,482 monthly mortgage payments.

This figure assumes the following:

  • $100,000 cash down payment
  • 3.25% rate of interest
  • Mortgage term of 30 years 

As you see, since you are financing $800,000 out of the purchase price, the salary you need per year is equivalent to the scenario where you are financing the purchase of an $800K home and leaving no cash down payment.

House Purchase Price of $1,000,000

Let’s look at a third scenario to make sure you have the information that you need.

Now, let’s say you are buying a $1,000,000 home where you will leave $200,000 in cash down payment and you’ll need a mortgage of $800,000 for the balance.

In this example, since the amount you’ll need to finance at the bank is always $800,000, you will still need a salary of $149,214 per year to be able to afford this house.

Rule of Thumb Calculation

I personally believe that anyone purchasing an expensive home should make the appropriate budget of their earnings and expenses, speak with their lender to see what type of mortgage options they can get, and make an informed decision.

However, if you don’t want to go through a detailed calculation to determine the feasibility of your desire to get a home requiring you to get $800K in mortgage, you can use a simple rule of thumb calculation.

25% of Total Mortgage 

One rule of thumb approach is that you will need to make an annual salary of at least 25% of the value of your loan to be able to afford it.

In our case, to get an 800K mortgage, you’ll need to make an annual salary of $200,000 to be able to afford it.

25% Mortgage Payments

Another rule of thumb approach uses the same principle but with your monthly mortgage payments.

The idea is that you should not pay more than 25% of your take-home income for your mortgage.

In our example, for an $800K mortgage, 30 year term, 3.25% interest, your monthly mortgage payment comes out to $3,482.

If $3,482 should not be more than 25% of your take-home income, it means that you will need to have a $13,928 take-home income.

If your tax rate is 37%, you’ll need a gross salary of $249,456 per year to afford your $800,000 mortgage.

How To Qualify For 800K Mortgage

There are many factors that banks and lenders will consider to qualify you for an $800,000 mortgage.

First, $800,000 is a lot of money.

This means that the lender will want to make sure that you have good credit and capacity to pay back the money.

Also, the lender will want to make sure that your house is effectively worth as much as you are willing to pay for it.

To qualify for a mortgage, here are some factors that lenders consider:

  • Your creditworthiness 
  • How much cash down payment you are leaving
  • The rate of interest 
  • How much debt do you have in general
  • The value of the house you are purchasing 
  • If there’s a co-signer or the mortgage 

Income Needed For 800K Mortgage Takeaways 

So, there you have it folks!

Asking yourself how much income do I need for a 800K mortgage?

How much do I need to be able to afford a house where I need an $800,000 mortgage?

What Income Do You Need For A $800,000 Mortgage

In this post, I calculated your mortgage in different ways to see how much you need to earn to be able to get yourself an $800,000 mortgage to purchase your home.

Keep in mind that everyone’s financial situation is different and so there’s no cookie-cutter answer for everyone.

Based on a generalized approach and with some assumptions, you’ll need anywhere between $149,214 to $249,456 to be able to get an 800K mortgage.

Now that you’re equipped with these numbers, good luck in your research and investigation!

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With that being said, let’s head right back to our main topic!

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