Dave Ramsey Says This Is the Only Mortgage You Should Consider. Is He Right?

Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.


  • If you take out a 15-year mortgage, you can potentially save yourself a lot of money on interest in the course of paying off a home.
  • You'll need to make sure you can swing the higher monthly payments a 15-year loan will come with.

Most people cannot afford to pay for a home in cash. If you're in that boat, you'll need to finance your home purchase with a mortgage. But you have choices in that regard.

Mortgages come with terms of differing lengths. And while 30-year mortgages tend to be the most popular among home buyers, there's also the option to take out a 15-year loan.

Financial guru Dave Ramsey says, "The only type of mortgage you should consider is a 15-year, fixed-rate conventional mortgage." He also says, "Going with a 15-year instead of a 30-year will save you tens of thousands in interest."

He's right about that last part. But whether you can actually swing a 15-year mortgage is a different story.

The savings could be huge

Taking out a 15-year mortgage rather than a 30-year one could save you a lot of money on interest for two reasons. First, you're paying off that loan in a shorter period of time, so you're not paying as much interest by virtue of that alone. You might also snag a lower mortgage rate to begin with by signing a 15-year loan instead of a 30-year loan.

In fact, let's say you're buying a $400,000 home and are putting down 20%, or $80,000, at closing. Let's also say you sign a 30-year mortgage at 6.39%, which is the average rate for that loan product as of late April 2023, per Freddie Mac. In that case, you'll end up spending about $400,000 on interest in the course of paying off your home. (Yes, you read that correctly.)

Meanwhile, the average rate today on a 15-year loan is 5.76%. If you borrow the same $320,000 at that rate over 15 years instead, you'll end up spending more like $159,000 on interest all in. That's a savings of around $241,000.

Now, think about the things you can do with $241,000. You could put your kids through college, or take a really nice vacation every year for well over a decade. So it's easy to see why a 15-year mortgage might be a tempting prospect.

Can you afford a 15-year mortgage?

Clearly, there are savings to be reaped on interest when you opt for a 15-year mortgage over one that'll take you double the time to pay off. But before you rush to sign a 15-year mortgage, consider whether the higher payments that come with it will work for your budget.

In the above example, your monthly payment of principal and interest for a 30-year loan comes to $1,998. For a 15-year loan, it's $2,659. That's a $661 difference per month, and you may not be able to swing that higher amount.

That's why Ramsey's advice, although spot-on, won't apply to everyone. If you can handle the higher monthly payments of a 15-year loan, then you might as well save yourself money on interest -- especially at a time like this, when mortgage rates are just plain up across the board. But if those higher payments are a stretch for you, then you may be better off sticking to a longer-term loan -- even if that means having to spend more money on interest over time.

Alert: our top-rated cash back card now has 0% intro APR until 2025

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee! Click here to read our full review for free and apply in just 2 minutes.

Our Research Expert

Related Articles

View All Articles Learn More Link Arrow