The math at $1M
$1,000,000 a year is $83,333 a month gross; the guideline allows ~$23,300 for housing and $30,000 for all debts. Take-home runs very roughly $44,000–$49,000 a month — at this level well over 40% of gross goes to federal and California income tax — so the guideline payment is about half of net.
Worked examples at 7% (an example rate):
- $3.75M home, 30% down → $2.625M loan → $17,456 P&I + ~$3,600 property tax + ~$900 insurance = ~$21,950 a month, under the guideline.
- $4.5M home, 35% down → $2.925M loan → $19,451 P&I + ~$4,310 tax + ~$1,100 insurance = ~$24,850 a month — 30% of gross.
Is $1M a good salary in California?
It is more than ten times the statewide median household income (about $96,000, Census ACS) and in the top fraction of a percent of earners. For a purchase, the number has stopped being interesting; the structure of the income still matters (see the $600k guide on equity-heavy packages and lumpy years), and everything else on this page matters more.
Why people at this income still finance
- Liquidity. Cash in the house is cash that is expensive to get back out; a mortgage at a competitive rate keeps capital deployed and available.
- Rate versus expected return. If your portfolio's expected long-run return exceeds your after-tax mortgage rate, leverage on the house is cheap leverage. If it doesn't, or if the volatility keeps you up, paying down wins. Only the first $750k of balance carries deductible interest, so model the marginal millions at the full rate.
- Relationship pricing. Private banks discount jumbo rates for clients who move assets; at $2.5–3M of loan the concessions are real and negotiable. Compare a private bank, a retail bank, and an independent jumbo lender, with the whole relationship priced in.
- Pledged-asset and asset-depletion structures exist for buyers with deep assets and irregular income — legitimate tools with embedded leverage; model the bad year.
How you hold title outlasts how you pay for it
At this price the deed is an estate-planning document. Most buyers in this range hold the home in a revocable living trust (avoids California probate, keeps control, no reassessment on transfer into the trust); some use an LLC for rental or privacy reasons with tax and lending trade-offs; married couples should understand community property with right of survivorship and the step-up in basis. Our home-in-a-trust guide covers the mechanics; your estate attorney and CPA should be in the conversation before escrow opens, because changing title after closing can trigger lender and title-insurance questions that are avoidable.
Measure ULA and the cost of leaving
If the house is inside the City of Los Angeles, know the exit cost before you buy: Measure ULA adds a 4% transfer tax on sales above roughly $5.3 million and 5.5% above roughly $10.6 million (thresholds adjust each July for inflation), on top of the standard city and county documentary transfer taxes. It is paid by the seller, applies to the whole price rather than the excess, and has changed how the $5M+ market trades — a $4.5M purchase sits under it today, but a $5.5M one does not. Neighboring cities (Beverly Hills, Santa Monica, Culver City) have their own transfer-tax schedules; check the specific city, not the county.
The costs that scale with the house
- Property tax: ~1.1–1.25% is $45,000–$55,000 a year on a $4M home, plus the supplemental bill after closing. Prop 13 then holds the assessed value to ~2% annual growth, which is why long-held homes carry tax bills that look nothing like yours.
- Insurance: high-value homes need specialty carriers, and in fire-zone hillsides and canyons some addresses are effectively uninsurable at any price outside the FAIR Plan plus a wrap policy. Get the insurance answer before the offer, every time — at this tier it can veto a house.
- Maintenance: 1–2% of value, $40,000–$80,000 a year on average, and the larger the property the lumpier the years.
- Appraisals and escrow: two appraisals are common on loans this size; plan 30–45 day escrows.
How your credit score changes this
Private banks price the file even while courting your assets, and jumbo tiers step at the usual bands:
| Score band | What it typically means for a conventional loan |
|---|---|
| 780+ | Best pricing tier under the current agency grids |
| 740–779 | Strong — small pricing add-ons at most lenders |
| 700–739 | Solid — noticeable pricing add-ons start here |
| 660–699 | Approvable — pricing and mortgage-insurance costs step up meaningfully |
| 620–659 | Conventional floor territory — FHA often prices better here |
| Below 620 | Conventional is out; FHA allows 580+ at 3.5% down (500–579 requires 10% down) |
At $2.6M of loan, a three-quarter-point rate difference is $180,000+ of house for the same payment, or roughly $1,300 a month on the same address. Files at this bracket fail on noise — a co-signed loan, a business card, utilization in a liquidity month — not on weakness. Pull your reports first, and keep the picture frozen through closing.