How much house can I afford on $400k income?

The practical answer

At $400,000 of household income, affordability stops being about lender approval entirely — a bank will happily approve a mortgage you would regret. The real question becomes how much home to buy while preserving the investing trajectory that a $400k income makes possible.

A worked example: a couple earning $400k with $500,000 invested, keeping a $75,000 cushion, putting 20% down on a 30-year fixed at 6.5% in a West Coast metro, models out to a wide range: roughly $1.1M if they protect 100% of a $2.5M wealth goal, $1.7M balanced, and $2.1M stretching — the balanced case carrying about $340,000 down and $9,700/month including property tax.

• The spread between conservative and aggressive is nearly $1M wide at this income — the wealth goal you pick effectively chooses your house.
• Jumbo loan pricing, not conforming limits, governs most purchases at this level; rate shopping matters more.
• At 37% marginal federal rates plus state tax, pre-tax income overstates buying power by nearly half in high-tax states.
• Buyers here often hold concentrated stock or equity comp — model the down payment source and its tax cost explicitly.

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