Salary and Home Buying: How Your Income Affects Your Mortgage

When you think about buying a home, your salary, the regular income you earn from work, typically paid monthly or annually. Also known as annual income, it's the single most important number lenders look at before approving your mortgage. It’s not just about how much you make—it’s about how that number connects to your rent, debts, and the price of homes in your area. If you earn $70,000 a year, you might assume you can afford a $350,000 house. But lenders don’t work that way. They use strict formulas to decide how much you can safely borrow, and those formulas are built around your debt-to-income ratio, the percentage of your monthly income that goes toward paying debts like loans and credit cards. If your monthly debts eat up too much of your paycheck, even a high salary won’t get you approved.

Your mortgage borrowing, the maximum loan amount a lender will offer based on your income, credit, and financial history. isn’t a guess—it’s a calculation. Most lenders cap your monthly mortgage payment at 28% of your gross income. That means on a $70,000 salary, your max monthly payment is around $1,633. Then they add in your other debts—car loans, student loans, credit cards—and make sure the total doesn’t go over 36% to 43% of your income. That’s your debt-to-income ratio, the percentage of your monthly income that goes toward paying debts like loans and credit cards. If you’re carrying $500 in monthly debt payments, that cuts into your mortgage budget fast. That’s why two people with the same salary can qualify for wildly different loan amounts. One has a car payment and student loans. The other doesn’t. Simple as that.

And it’s not just about the numbers. Your salary also affects what kind of home you can actually find. In some areas, $70,000 gets you a three-bedroom house. In others, it barely covers a studio apartment. That’s why knowing your borrowing power helps you focus your search. You don’t waste time looking at homes you can’t afford. You don’t get heartbroken over a place you’ll never own. You know exactly what’s in your reach. Below, you’ll find real examples from people who’ve been there—how much house they could afford on $70,000, how shared ownership changes the math, and why some landlords won’t even consider renters with certain income patterns. This isn’t theory. It’s what actually happens when your paycheck meets the housing market.