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Ramsey Mortgage Calculator

269 words Calculator
Recommended: ≤ 25% of take-home pay
Ramsey recommends 20% or more
0%100%
20%
0%20%

Ramsey Principles

  • ✓ ≥20% down payment (avoid PMI)
  • ✓ 15-year fixed rate mortgage
  • ✓ Payment ≤25% of take-home pay

Enter your mortgage details to see calculations

Calculate your mortgage the Dave Ramsey way! Get monthly payments, interest costs, and payoff dates. Follow Ramsey’s principles for debt-free home ownership.

Ramsey Mortgage Calculator: Smart Home Loan Planning

What Is This?

A financial calculator that helps you plan home purchases using Dave Ramsey’s proven methods. Shows monthly payments, total interest, and whether your plan follows Ramsey’s debt-free guidelines.

How to Use

  1. Enter your numbers:

    • Home price ($300,000 example)
    • Down payment (Ramsey recommends ≥20%)
    • Interest rate (current average: ~7%)
    • Loan term (15-year recommended)

  2. See instant results:

    • Monthly payment amount
    • Total interest cost (shocking!)
    • Payoff date
    • Pie chart showing cost breakdown

  3. Check Ramsey compliance:

    • Green checkmarks = following Ramsey principles
    • Red X’s = areas for improvement

Key Formulas

Monthly Payment

Payment=P×(r(1+r)n)/((1+r)n−1)Payment = P × (r(1+r)^n) / ((1+r)^n - 1)
  • P = Loan amount (Home price - Down payment)
  • r = Monthly interest rate (Annual rate ÷ 12)
  • n = Total payments (Years × 12)

Total Interest

TotalInterest=(MonthlyPayment×n)−PTotal Interest = (Monthly Payment × n) - P

FAQs

Q: Why does Ramsey recommend 15-year mortgages?

A: You pay less interest (saving $100,000+ vs 30-year) and build equity faster.

Q: What if I can’t afford 20% down?

A: Ramsey suggests waiting until you’ve saved more to avoid PMI and higher payments.

Q: Is the 25% payment rule before or after taxes?

A: After taxes (take-home pay). Example: 6,000/monthpay=max6,000/month pay = max1,500 mortgage payment.

Terminology

  • PMI: Private Mortgage Insurance (extra fee if down payment <20%)
  • Amortization: How payments split between principal/interest over time
  • Equity: Home value you actually own (not the bank)

Formula Source

Standard US mortgage math used by lenders. Matches Ramsey’s “Financial Peace University” teachings.

Important Notes

  • ✅ 15-year mortgages save 50-70% interest vs 30-year
  • ⚠️ “No payment shock” rule: Don’t buy more house than 25% of your take-home pay
  • 🔍 Example: 300khome→300k home →60k down (20%) → 15-year @7% = $1,799/month
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