With a $40,000 down payment (20%), a 6.5% rate, and a 30-year term, your principal and interest payment would be approximately $1,011 per month. Adding property taxes and insurance brings the total to roughly $1,311. Your actual payment may vary based on your specific tax rate and insurance premium.

A common guideline is that your monthly housing payment should not exceed 28% of your gross monthly income. With a total payment around $1,311, you'd want a gross annual income of at least $56,000. Lenders also consider your other debts when determining how much you can borrow.

Putting 20% down ($40,000) lets you avoid private mortgage insurance (PMI), which can add $50–$150 per month to your payment. If saving that much is difficult, many loan programs allow 3-10% down, but you'll pay PMI until you reach 20% equity. Weigh the upfront savings against the ongoing PMI cost.