If you earn around $100,000 a year, you’re probably wondering what kind of home you can actually afford. The good news is that a six‑figure salary opens up a lot of doors, but it also comes with its own set of rules. Lenders look at more than just your income – they check your credit score, existing debts, and how much you can put down upfront. Understanding these pieces helps you avoid surprises later.
The simplest way to gauge your borrowing power is the 4‑times‑salary rule. With $100k a year, many banks will let you borrow up to $400,000. That’s a rough starting point, not a final figure. Your actual limit could be higher if you have a low debt‑to‑income ratio or a strong credit history. Conversely, big credit‑card balances or a car loan will trim that number down.
Use an online mortgage calculator to plug in your salary, a 20% deposit, and a typical interest rate. You’ll see monthly payments, total interest, and how long you’ll be in debt. This step is essential before you start house hunting because it tells you which price ranges are realistic.
First, save a solid deposit. A 20% down payment on a $400k home is $80k – a big chunk, but it saves you thousands in interest and may get you a better rate. If that feels out of reach, consider a shared‑ownership scheme or a government‑backed loan, both of which let you put down less upfront.
Second, tidy up your credit score. Pay off high‑interest credit cards, avoid taking on new debt, and check your credit report for errors. A score above 700 usually lands you a lower interest rate, which can shave a lot off your monthly payment.
Third, think about the type of property you need. A starter home or a condo often costs less than a detached house, and you might get more space for the same money in a suburban area. Look at the whole package: schools, transport links, and future resale value. A cheaper property now could turn into a great investment later.
Fourth, factor in extra costs. Stamp duty, legal fees, moving expenses, and ongoing maintenance can add up quickly. A rule of thumb is to set aside 1‑2% of the purchase price each year for upkeep. If you ignore these, you might end up stretched thin.
Finally, talk to a mortgage broker. They compare offers from multiple lenders and can often negotiate better terms than you’d get on your own. Bring your pay slips, tax returns, and a list of debts to the first meeting – the more info you give, the clearer the picture they can paint.
Putting these steps together gives you a realistic game plan. With a $100k salary, you can aim for a home in the $300k‑$450k range if you keep your debt low and save a decent deposit. Remember, the goal isn’t just to get a roof over your head; it’s to choose a property that fits your lifestyle and leaves room for future financial moves.
Ready to start? Grab a calculator, check your credit, and line up your savings. Once you have those numbers, the house hunt becomes a lot less intimidating and a lot more exciting.
