How much do you need to make to afford a $500,000 house in Utah?
You need about $130,000 a year with 20% down, or about $166,000 with a 3.5% down FHA loan, at the 7.24% average 30-year rate Freddie Mac reported for October 29, 2026. Those figures apply the 28% housing guideline to a primary residence in Utah with no HOA dues and no other debts. For comparison, Utah's median household income is $95,166. A $500,000 budget is close to the middle of the Utah market, since Zillow's typical Utah home value was $532,920 in September 2026. The 28% rule is a guideline, and lenders can approve more, so treat these as comfortable-budget figures and not as approval limits. The gap between the two figures comes from mortgage insurance and a larger loan, and it is why the size of your down payment matters as much as your salary.
What does each down payment require?
Lower down payments raise the income needed by adding loan balance and mortgage insurance. All four rows below use the same 7.24% rate for simplicity, though real quotes will differ by loan type and credit.
| Down payment | Cash down | Monthly payment | Income at 28% |
|---|---|---|---|
| 20% conventional | $100,000 | $3,031 | $129,891 |
| 10% conventional | $50,000 | $3,597 | $154,138 |
| 5% conventional | $25,000 | $3,779 | $161,975 |
| 3.5% FHA | $17,500 | $3,871 | $165,889 |
Data: calculated October 2026, from the Freddie Mac rate and the tax, insurance and mortgage insurance inputs below.
The payment includes principal, interest, property tax, insurance and any mortgage insurance. Cash down does not include closing costs, which are covered in the Utah buyer closing costs guide.
The income figure is the monthly payment times 12, divided by 0.28.
What goes into the monthly payment?
Principal and interest make up most of it, and property tax and insurance add about 8% to 10%. Here is the 20% down example, on a $400,000 loan:
| Item | Monthly | Basis |
|---|---|---|
| Principal and interest | $2,726 | 7.24%, 30 years |
| Property tax | $213 | $2,551 a year |
| Homeowners insurance | $92 | $1,107 a year |
| Total | $3,031 |
Data: calculated October 2026, from the Freddie Mac rate and the sources cited below.
Property tax. Utah exempts 45% of a primary residence's value, so a $500,000 home is taxed on $275,000. At the 2024 statewide average rate of 0.009275, that comes to $2,551 a year, about 0.51% of the price. The same home as a second home or rental would pay $4,638. Your own tax area may differ.
Insurance. The $1,107 is Utah's average HO-3 premium in the NAIC's latest report, which covers 2023. Current premiums are likely higher, so get a quote on the actual home. At $1,500 a year, the income needed rises by about $1,400.
Mortgage insurance. Conventional rows assume PMI at 0.60% of the loan a year, the midpoint of Freddie Mac's range of $30 to $70 a month per $100,000 borrowed. This is an assumption, and your rate will depend on your credit and down payment. FHA uses HUD's figures: 1.75% upfront, added to the loan here, and 0.55% a year.
How do your other debts change the answer?
Car loans, student loans and card payments only change this answer once they get large. The common companion to the 28% rule is a 36% limit on total debt. At the payments above, the 36% test starts to matter once other monthly debts pass about $866 with 20% down, or about $1,030 to $1,110 with a smaller down payment.
| Down payment | Income at 36%, no other debt | $500 a month in debts | $1,000 a month in debts |
|---|---|---|---|
| 20% conventional | $101,026 | $117,693 | $134,360 |
| 10% conventional | $119,885 | $136,551 | $153,218 |
| 5% conventional | $125,981 | $142,647 | $159,314 |
| 3.5% FHA | $129,025 | $145,692 | $162,358 |
Data: calculated October 2026, using the same monthly payments as the first table.
Use the higher of the 28% figure and the 36% figure. With $1,000 in monthly debts and 20% down, for example, the 36% result of $134,360 replaces the $129,891.
What will a lender actually approve?
Possibly less income than these tables suggest, since underwriting limits sit above the guideline. Fannie Mae's Selling Guide allows a total debt ratio up to 50% through its automated system, and up to 45% on manual underwriting with credit and reserve requirements. FHA's manual limits start at 31% for housing and 43% for total debt, and rise with compensating factors.
With 20% down and $500 in other debts, a 50% ratio works out to about $84,700 in income. That is a ceiling for a strong file, and a payment at that level leaves far less room each month. Talk to a lender early, since only a real pre-approval tells you your number. This article is general information and not a lending decision.
What moves the number most?
The rate and the down payment. Tax and insurance barely register by comparison.
| Scenario, 20% down | Income at 28% |
|---|---|
| Rate of 6.74% | $124,137 |
| Rate of 7.24% | $129,891 |
| Rate of 7.74% | $135,758 |
| Insurance of $1,500 a year | $131,295 |
Data: calculated October 2026, changing one input at a time from the 20% down example.
Each half point of rate moves the income needed by about $6,000 at 20% down, and by about $7,000 on an FHA loan. Going from 10% down to 20% down lowers it by about $24,000, because you also drop PMI.
Two details are worth keeping in mind. FHA mortgage insurance at this down payment lasts for the life of the loan. Conventional PMI ends automatically when the balance is scheduled to reach 78% of the home's original value.
What can $500,000 buy in Salt Lake City?
It sits between the typical condo and the typical house. Zillow's September 2026 index puts the typical Salt Lake City condo at $402,845 and the typical single-family home at $607,490, so $500,000 reaches well into the condo market and falls short of the typical house in the city. See Salt Lake City home prices explained for the full picture.
For a personalized version, start with how much house you can afford in Utah and the Utah mortgage and financing guide. If you would like to talk through a budget and what it buys in a specific area, contact me here or call 801-628-1281.