How Much House Can You Afford on $120K?
Your $120K salary translates to $10,000/month gross income. Here's exactly how lenders calculate your home buying power in 2026.
| Scenario | Max Home Price | Monthly Payment |
|---|---|---|
| Banker's Recommendation (22%) | $310K | $2,208 |
| Conservative Rule (28%) | $395K | $2,813 |
| Bank Maximum (43% DTI) | $605K | $4,309 |
🏦
Licensed Banking Professional
23 Years · Mortgage Specialist
On a $120K salary, the bank will approve you up to $605K. I recommend staying at $310K-$395K. The difference is $1,118/month — and that money is the difference between building wealth and just surviving.
Down Payment & Cash Requirements
| Item | Amount (Based on $395K Home) |
|---|---|
| Down Payment (20%) | $79,000 |
| Closing Costs (3%) | $11,850 |
| Moving + Repairs Buffer | $5,000 |
| 6-Month Emergency Fund | $16,880 |
| Total Cash Needed | $112,730 |
What Hurts Your Buying Power on $120K?
- Car payment of $400/month: Reduces your max home price by ~$75K
- Student loan of $300/month: Reduces max home price by ~$55K
- Credit score under 680: Higher rate = lower buying power
- Less than 2 years at current job: Lender may require larger down payment
→ Get Your Personalized Number
Your actual buying power depends on your specific debts, credit score, and down payment. Use our mortgage calculator for a precise estimate.