Your income is an important factor in the home buying process. Not only does it determine what your budget and home loan options are, it also influences whether you can afford ongoing costs like maintenance, property taxes, and homeowner’s insurance. Carefully evaluating your income is essential before beginning your home search. This is the income you will need to make if you are considering a property priced around $1.5 million.
To get a $1.5 million mortgage, you’ll probably need a jumbo loan, which is a mortgage loan intended for more expensive properties. These are mortgages that are not backed by any government agency, such as the FHA or VA, and go well beyond the limits of traditional conforming loans.
However, jumbo loans are often more difficult to obtain. Because they are riskier for lenders (more money is at stake), they also tend to charge higher interest rates.
Here’s a look at what a $1.5 million home might look like from a mortgage perspective. Keep in mind that rates vary by mortgage lender, as do minimum down payment and other requirements. You may have to pay between 10% and 30% of the purchase price. Use the table below only as an example of what you might expect the monthly payment for a home in this price range to be based on current market conditions, including national averages for property taxes and homeowners insurance.
Keep in mind that your monthly payment and down payment aren’t the only costs you need to think about when buying a home. There will also be closing costs. Closing costs for a regular conforming loan typically add up to 2% to 5% of a home’s purchase price, so you’ll need to budget a little more when applying for a jumbo loan.
Each lender will have their own rules and qualification requirements, but there are some general guidelines you can use to evaluate whether your income is enough for the mortgage that could come with a $1.5 million home. See below for some of the most common ones.
Under the 28/36 rule, your new home payment should be no more than 28% of your monthly pre-tax income, while your total monthly debts (your mortgage, plus things like student loans, car loans, and credit cards) should be no more than 36% of your pre-tax income. These numbers are what lenders call your debt-to-income (DTI) ratio.
If you work backwards from that estimated $8,056 monthly payment we calculated above, the 28/36 rule would say you’d need an income of at least $28,771 per month, or about $345,257 per year, to pay off the mortgage that comes with a $1.5 million home.
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Monthly salary before taxes: $28,771
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Annual salary before taxes: $345,250
With the 25% rule, you will only take into account your after-tax income, also known as your take-home pay. Under this rule, your mortgage payment should not exceed 25% of your monthly after-tax income. Based on an estimated monthly payment of $8,056, you would need a monthly after-tax income of about $32,224 to pay the mortgage on a $1.5 million property.
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Monthly salary after taxes: $32,224
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Annual salary after taxes: $386,592
The 35/45 rule is a similar approach, although it takes into account pre- and post-tax income. With this, your final DTI ratio, which includes all your monthly debt payments, should be no more than 35% of your monthly income before taxes and no more than 45% of your (take-home) income after taxes.
Using the estimated monthly payment of $8,056 calculated above, you would need to earn about $23,017 per month before taxes, or $276,206 per year, to pay the mortgage on a $1.5 million home.
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Monthly salary before taxes: $23,017
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Annual salary before taxes: $276,206
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Monthly salary after taxes: $17,902
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Annual salary after taxes: $214,827
The calculations above are only accurate if your new mortgage payment is your only monthly debt. Any other current debt, such as credit card bills or personal loan payments, will mess up the numbers and you’ll likely need more income to cover the costs of your new home. Talk to a loan officer or mortgage broker to make calculations for your specific situation.
It’s important to remember that owning a home comes with other long-term costs. You’ll want to make sure you have enough income to cover potential repairs and funds available for regular maintenance. Experts typically recommend budgeting at least 1% to 4% of a home’s purchase price for annual home maintenance. On a $1.5 million home, that would equate to between $15,000 and $60,000 a year.
The costs of your property taxes or homeowners insurance premiums could also increase over time.
By using Yahoo Finance’s housing affordability calculator below, you can see how much home you can comfortably afford given your current income, debt, and other homeownership costs. This can help you determine if you can afford a $1.5 million home.
Given current interest rates, homeowners insurance premiums, and property tax bills as of February 2026, you would need an annual pre-tax income of $276,206 to $345,250 to pay the mortgage that comes with a $1.5 million home. That’s a 20% down payment, which is commonly required for jumbo loans.
The salary needed to pay for a $1 million home depends on the interest rate you get, the size of your down payment, your debts, and other factors. A giant 30-year, million-dollar mortgage at a rate of 6.35% would come with a monthly payment of $6,222 in principal and interest. This would probably be within budget with a salary of $300,000.
A jumbo loan can help you pay for a $1.2 million home. They typically require large down payments (10% to 30%) but allow you to spread your home costs over 30 years.
Laura Grace Tarpley Edited this article.