What is Dave Ramsey’s mortgage rule?
A straightforward look at a popular personal finance guideline for buying a home.
What is Dave Ramsey’s mortgage rule? This question often comes up when homebuyers want a simple framework for keeping housing costs and debt under control.
Answer
Dave Ramsey’s mortgage guidance is conservative and focuses on avoiding excessive debt and risk. He recommends purchasing a home with at least 10%–20% down and choosing a 15 year fixed rate mortgage, aiming for a payment no more than about 25% of take home pay, including taxes and insurance. His approach discourages adjustable rate loans, interest only payments, and stretching to qualify for a larger house. While many buyers use 30 year loans, Ramsey’s rule highlights the benefits of faster payoff and lower total interest. Use a calculator to compare 15 and 30 year scenarios and decide whether his guideline fits your budget and risk tolerance.
Try scenarios with our mortgage calculator to see how payments change between 15 and 30 year loans.
Visit the main mortgage FAQ page for answers to common rate, payment, and loan questions.