A lot of us dream about leveling up our living situation — more space, a nicer neighborhood, maybe even a little backyard for the dog. And for many people, a $1 million home feels like that perfect “I’ve made it” milestone.
But here’s the real question: How much income and net worth do you actually need to buy a $1 million home without feeling like you’re drowning?
Let’s break it down in simple, real-world terms.
There’s this general rule that smart homebuyers follow, called the 30/30/3 rule:
- Your mortgage should be less than 30% of your gross monthly income.
- You should have at least 30% of the home price saved (20% for down payment, 10% as a cash buffer).
- You shouldn’t spend more than 3–5x your income on a house.
If we do the math for a $1 million house:
- You’d want $300K in cash (down payment + reserves).
- You should be making somewhere between $200K–$333K a year.
If you’re on the lower end ($200Kish), you can probably still swing it, but it’ll feel tight — like “maybe we don’t need HBO and Netflix” tight.
At $300K+? You’re sitting a lot more comfortably.
This part is super underrated.
A lot of people dump every penny into their house and call it a day. Bad move.
You don’t want your house to be your whole net worth.
Ideally:
- Your house = 20–30% of your total assets.
So if you’re buying a $1M home, you’d want a net worth between:
- $3.3M (house = 30% of total assets)
- $5M (house = 20% of total assets)
Could you do it with $1.5M–$2M? Technically yes. But that’s cutting it pretty close — you’ll feel a lot better if you’ve got a bigger financial cushion.
Quick Cheat Sheet
| Ballpark Amount | |
|---|---|
| Minimum Income | ~$200K/year |
| Safer Income | ~$300K+/year |
| Minimum Net Worth | ~$1.5M–$2M |
| Recommended Net Worth | ~$3.3M–$5M |
Everyone says “just put 20% down,” but honestly?
If you can swing 30–40%, you’ll thank yourself later.
At a 7% mortgage rate:
- $800K loan → ~$5,325/month
- $600K loan → ~$3,995/month
That’s a $1,300/month difference.
That’s vacations, investing, saving for the kids’ college… or just breathing easier.
Bigger down payment = smaller loan = happier you.
Buying the house is just the start. Owning it gets expensive too:
- Property taxes: $10K–$25K/year
- Insurance: $1.5K–$5K/year
- Maintenance: $10K–$20K/year (think roof leaks, water heaters dying, etc.)
- Utilities: $300–$800/month
- Furniture and upgrades: easily $50K+ if you want it to look Pinterest-worthy
If you’re already stretching on the mortgage, these extras are gonna sting.
Say you and your partner make $250K combined.
You put $200K down and borrow $800K at a 7% rate.
Your housing costs:
- Mortgage: ~$5,325/month
- Taxes & insurance: ~$1,200/month
- Maintenance: ~$800/month
That’s around $7,300/month.
Or ~35% of your gross income.
You can do it, but you better love your house… because you’ll be seeing a lot of it.
Buying a $1 million house can be awesome.
But it can also feel like a never-ending money pit if you’re not financially ready.
Bottom line:
- Make at least $250K–$300K/year.
- Have $200K–$300K cash ready.
- Try to have $2M–$5M net worth.
If you’re not there yet, that’s okay!
Rent somewhere nice, keep stacking your cash and investments, and when you’re truly ready — you’ll know.
Because the goal isn’t just to own the house.
It’s to own the house and still have a life.
