Why Dave Ramsey's 15-Year Mortgage Rule Won't Help You Buy a House

Financial celebrity Dave Ramsey has built a following with his no-nonsense advice, but one of his most famous rules—that you should never take out a mortgage longer than 15 years—deserves a closer look. In today’s market of high rates, high prices, and stagnant wages, this blanket recommendation can be unnecessarily restrictive and sometimes counterproductive.

The 2025 housing market presents unique challenges.

Mortgage rates remain well above historic norms—often over 6%—making monthly payments steep even on smaller loans. Home prices have stayed stubbornly high in both urban and suburban markets, eroding affordability. Against this backdrop, locking into an inflexible, higher-payment 15-year mortgage can limit options, drain liquidity, and even push potential homeowners out of the market entirely.

Why Ramsey's Rule Doesn’t Fit 2025

At the heart of Ramsey’s pitch is debt aversion: avoid paying interest for decades, build equity faster, and get debt-free sooner. But that discipline comes at a cost—locking away cash that could serve you better elsewhere.

In 2025, the problem is clear:

• Rates are elevated: A 15-year loan might be 0.5% lower in rate, but payments can be nearly double.

• Home prices are high: Many U.S. starter homes exceed $500,000.

• Incomes haven’t kept pace: Median household income sits around $80K, far below the level needed for most 15-year loans.

And Ramsey's love affair with the 15-year mortgage misses one huge point entirely: becoming a homeowner has massive financial upside beyond the interest math. If someone skipped buying a house in 2020 because they couldn’t swing a 15-year payment, they would have missed out on years of equity growth and appreciation—potentially hundreds of thousands in net worth—despite the rate environment. In real estate, you get in the game to win, and ownership itself is often the biggest wealth-builder most Americans will ever have.

Reality Check: $500k loan using a 15-year vs 30-year term

Let’s compare a $500,000 mortgage at today’s rates: 6.0% for a 15-year, 6.5% for a 30-year. Assuming 3% annually for property taxes and homeowners insurance, and using a 50% debt-to-income (DTI) ratio cap (not including other debts):

The monthly principal and interest on a 15-year is about $4,219, while the 30-year is roughly $3,160. Once you add an estimated $1,250 for property taxes and homeowners insurance (about 3% annually), your total monthly housing costs jump to around $5,469 for the 15-year and $4,410 for the 30-year. At a 50% DTI cap—and not even factoring in other debts—you’d need roughly $131,000 in annual income for the 15-year versus about $105,800 for the 30-year. That’s a $25,000 income gap just to choose the shorter term.

Difference: Not only does the 15-year loan require about $1,059 more each month in principal and interest but you’d need roughly $25,000 more in annual income to qualify for the same loan amount just because you want a shorter term.

Liquidity and Flexibility Matter

Equity is valuable, but it’s not spendable without selling or borrowing. Younger buyers, families, and self-employed borrowers often need the breathing room that a 30-year term provides. A high monthly payment can leave you “house-rich but life-poor.” With a 30-year mortgage, you control how aggressively you pay down your principal—you can always make extra payments when it makes sense for you, but you’re not locked into a punishing schedule. This flexibility is crucial in an environment where interest rates are expected to trend downward over the next two years, giving many homeowners the chance to refinance into shorter terms at lower rates without overextending themselves today.

Why a 30-Year Loan Could Be Your Best Move

Preserve Cash Flow

A 30-year term keeps monthly obligations manageable, freeing up funds for investments, retirement contributions, education savings, or emergencies. Liquidity gives you resilience and flexibility that tying every dollar into home equity cannot.

Afford High-Cost Markets

In expensive markets, a 30-year can mean the difference between owning now or waiting years. Getting in sooner lets you benefit from appreciation and start building equity immediately.

Adapt to Income Changes

For those with variable or growing incomes, a 30-year’s lower payment gives breathing room during slow months. As your income grows, you can pay extra without risking overextension.

Flexibility for Extra Payments

You can always pay off a 30-year on a 15-year schedule—but you can’t stretch a 15-year if life throws you a curveball.

A Balanced Strategy

• Start with a 30-year fixed for flexibility.

• Make extra principal payments when possible.

• Use biweekly payments to add an extra month each year.

• Refinance if rates drop and a shorter term becomes affordable.

Why Work With LendFriend Mortgage

At LendFriend Mortgage, we tailor mortgage strategies to fit your life—not rigid financial dogma. Whether you’re buying your first home, moving up, or investing, we help you secure competitive rates and terms that balance affordability with wealth-building potential.

From pre-approval to closing—and beyond—we provide guidance rooted in real-world market expertise. Explore our LendFriend Learning Center for practical, up-to-date advice that helps you win in any market.

You can also sign up for our Rate Alerts to get our weekly mortgage rates and market updates sent directly to your phone.

The Bottom Line

Dave Ramsey’s 15-year rule sounds disciplined, but in 2025 it can delay homeownership, limit your options, and strain your finances. Real financial freedom comes from balancing equity growth with liquidity and flexibility—not just racing to pay off your mortgage.