Why Only A 15-year Mortgage?

House Payment

House PaymentDear Dave,

Why do you only recommend 15-year mortgages?

Nikki

Dear Nikki,

I recommend 15-year mortgages, and never more than that, because the normalization of the 30-year mortgage has helped created a constant state of financial bondage for the middle class. It’s caused average, everyday people to lose hope of ever paying off their homes and being totally debt-free.

I understand that it costs a little more per month when you have a 15-year house note instead of a 20- or 30-year mortgage. But really, it’s just a few dollars more—like 20 percent more than you’d pay on a traditional 30-year mortgage. Plus, it gets you out of debt at least 15 years earlier!

Think about this, too. Did you know that people who take out 15-year home loans have a higher probability of paying them off early? It’s true. It’s because they know from the start that they’re not going to have a house payment hanging over their heads for the rest of their lives. They can see light at the end of the tunnel right from the start.

Broke people ask questions like how much down and how much per month. Rich people, or people with a plan who are going to be rich one day, ask how much or what’s the total price!

—Dave

Dave Ramsey* For more financial help, please visit daveramsey.com.

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