Buying a home in Massachusetts has never been more competitive. With prices still rising, limited inventory, and mortgage rates hovering above historical averages, many first-time buyers are asking the same question:

“How much do I need to earn to afford a $400,000 house in Massachusetts?”

Whether you’re looking in the suburbs, near a commuter rail line, or in towns just outside Boston, understanding affordability is key. Here’s a clear, SEO-friendly breakdown specific to Massachusetts’ housing costs, including property taxes, insurance averages, and realistic mortgage scenarios for 2025.

Short Answer: Most Massachusetts Buyers Need $95,000–$120,000 Per Year

Because Massachusetts has higher-than-average property taxes, insurance costs, and utility expenses, buyers typically need:

✔ $95K–$120K annual income

to comfortably afford a $400,000 single-family home or condo.

Your exact salary depends on:

• Down payment amount

• Current mortgage rate

• Local property tax rate (varies widely by town)

• Homeowners insurance

• Existing monthly debt (student loans, car payments, etc.)

Why Massachusetts Homes Cost More to Carry Each Month

Massachusetts’ affordability differs from many other states because of:

1. Higher Property Taxes

MA property taxes vary from $10 to $20 per $1,000 assessed value depending on the town.

Typical tax on a $400K home:

• $4,800–$7,200 per year

• $400–$600 per month

Towns like Andover, North Andover, Reading, Beverly, and most North Shore suburbs fall in the moderate-to-high range.

2. Higher Homeowners Insurance

Average MA insurance premium:

• $1,500–$2,000 per year

• $125–$170 per month

3. Higher Utility Costs

Heating (oil/gas), electricity, and winterization costs tend to be above the national average.

Taken together, these expenses raise the monthly payment—and the salary needed to qualify.

Mortgage Scenarios for a $400,000 MA Home (2025)

Below are realistic monthly payment estimates based on MA taxes and insurance.

Scenario A: 20% Down Payment ($80,000)

• Loan: $320,000

• Rate: 7%

• P&I: ~$2,128

• Property tax: ~$450/month

• Insurance: ~$150/month

• Total Monthly Payment: ~$2,728

Income needed: ~$100,000–$105,000 per year

Scenario B: 10% Down ($40,000)

• Loan: $360,000

• Rate: 7%

• P&I: ~$2,393

• PMI: ~$150

• Property tax: ~$450

• Insurance: ~$150

• Total: ~$3,143

Income needed: ~$112,000–$120,000 per year

Scenario C: 5% Down ($20,000)

• Loan: $380,000

• Higher PMI

• Total payment often: $3,250–$3,350

Income needed: ~$120,000–$125,000+ per year

How Massachusetts Lenders Determine Affordability

Most MA lenders follow the 28/36 DTI rule:

• No more than 28% of gross income can go to housing

• No more than 36–43% can go to total debt

Because property taxes are higher in MA, this rule becomes even more important.

If your monthly payment is $3,000, lenders want to see:

• $10,700/month gross income, or

• ~$128,000 annual salary

But increasing your down payment or choosing a lower-tax town can reduce this significantly.

How to Lower the Salary Needed in Massachusetts

✔ Consider towns with lower property taxes

Examples:

• Wilmington

• Dracut

• Methuen

• Haverhill

• Billerica

✔ Increase your down payment

20% eliminates PMI and cuts your required salary.

✔ Reduce debt before applying

Lower student loan or car payments improve your DTI ratio.

✔ Shop lenders for better rates

Even a 0.25% lower rate can save thousands.

✔ Choose a condo—but compare HOA fees

MA condo fees can range from $300–$600/month, and sometimes more.

Is a $400,000 Home Realistic in Massachusetts?

Depending on the area, $400,000 may buy:

• A condo in Boston-adjacent cities

• A starter home in North Shore or Merrimack Valley

• A townhouse or small single-family in Worcester County

• A move-in-ready home in Western MA

Inventory at this price point is limited, but still available in commuter-friendly and growing markets.

In Massachusetts’ competitive real estate market, most buyers need $95K–$120K in annual income to comfortably afford a $400,000 home, depending on the down payment and town-specific tax rates.

Understanding the real numbers—mortgage payments, taxes, insurance, and utilities—helps buyers shop more confidently and avoid surprises during the approval process.

Matt Witte strives to be the best realtor in North Andover, MA.

Any questions about real estate, reach out to Matt Witte, North Andover Realtor, MA