Should you pay off your mortgage fast like Dave Ramsey says?

Question

When Dave talks, people listen. He’s like that uncle at Thanksgiving who bangs the table and swears one simple rule will change your whole life. And honestly, for families buried in credit card debt, his advice is gold.

But let’s fast forward. Back when rates were around 2.5%, I told my buddy, “Why would you pay that off? That’s the cheapest money you’ll ever borrow.” Paying it off early was like selling a Ferrari because you didn’t want to buy gas.

Now in 2025, rates are closer to 6.5%. That mortgage doesn’t feel like cheap gas anymore. It feels like premium fuel that makes you cringe every time you fill up.

Here’s the deal. If debt keeps you up at night, pay it down and enjoy the peace of mind. If you’re an investor who can beat 6.5% in the market, you might want to put your money to work instead. Some folks even split the difference with extra mortgage payments to keep Dave happy and rentals for growth.

So what about you? Would you pay it off or invest the difference?

Jules Aton · Answer

5% and under I make the minimum payment and DCA into TSM index fund. Above 5% I go 50/50 into extra principle vs TSM index fund.

Seth McGathey · Answer

5 years ago I would have paid it off. I was very Dave Ramsey mindset.

Today as an investor and with my knowledge, not a chance. I am not paying anything down quickly. If my rents cover my expenses, then I am riding it and enjoying the appreciation and mortgage pay down from someone else's pocket.

Dan H. · Answer

If you cannot achieve better than the conventional property interest rate as an investor, then you have no business investing.

Before the rates started to increase (q2 2022) I actively worked to maintains as high a leverage as I could.   Now that the rates are over double my rates, I am not so eager to refinance.

However, even if my RE interest rates were at 8%, I would not pay down early as 1) leverage increases ROI, COC, etc 2) I can find a plethora of investments that on the long term will, far out produce 8% 3) if it is a rental the tenant is paying the interest and if it is an OO and I itemize, I can write off the interest.   In a 30% total (state and fed) tax bracket, this equates to a 5.6% rate.  I suspect a lot of BP users are in a higher bracket than total 30% and are paying in effect less than 5.6% rate.

There is no way at this time I pay off a convention property loan early.   By the way my dti is over 80 to 1.   So I am not just saying it, but I am doing it.

Good luck

Joe Villeneuve · Answer

NO.  As long as it is CF positive, not now, not 5 years ago, not ever,...on an investment property.  On your own property, yes.  Not when the tenant is making the payments for you.  Take the money you would have spent on the principle on the REI, and buy another property with positive CF.  Same money spent, this way brings you more cash flow, and more property value, which when appreciation is applied to them, more gains in equity.

V.G Jason · Answer

It depends.

If you're building wealth & young with limited obligations, it's likely best to leverage and keep enough reserves to manage the headwinds. The long-term fixed rate trade is an excellent one with time on your side.

If you're building wealth, older,  and have obligations, it's likely best to find a happy medium and understand to eliminate debt appropriately. The long-term fixed rate trade can destroy peace of mind, stability, and overall function.

Nobody with a significant HNW is "leveraging" their houses. They got there via leveraging, but they know they need to consolidate.

Lack of debt= peace of mind. Again, finance is not just math it's behavioral.

Marcus Auerbach · Answer

Dave Ramsey offers advice for working families who struggle with credit card debt. It's good advice (for them).

On an investment property math is suggesting you take the money you would use to pay off the principal (presumably 75%) and buy 3 more (with 25% down).

I always remind people that in 1960 you could have bought a brand new house from a builder (with automatic air conditioning!!!) for $15,000. People took out a 30 year mortgage to pay off that loan. Let time (and inflation) work for you.

If fact, when you retire on your portfolio, you can use cash-out refis to skim off the annual appreciation. Tax free.

Jules Aton · Answer

Right it is important to recognize the emotional components to investing and make rational moves. My primary home has an interest rate of 1.875%. There is no amount of peace of mind for me that would make it ok to accelerate payments.

Should you pay off your mortgage fast like Dave Ramsey says?

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