Dave Ramsey Mortgage Calculator

Check the 25% Rule & Plan Your Payoff (Baby Step 6)

Your Financials
Loan Assumptions

Usage Instructions

How can I get started quickly?
  1. Enter your financials and loan assumptions:
    • Annual Take‑Home Pay (net income after tax)
    • Property Tax and Home Insurance (annual)
    • Annual Interest Rate
    • Loan Term (15 years recommended by Ramsey)
  2. Click “Calculate My Max Loan”. The tool estimates the maximum affordable loan so that the monthly mortgage PITI ≤ 25% of take‑home pay.
  3. Check the result card to see Pass/Fail and actionable tips.
What is Ramsey's 25% mortgage rule?
  • Ramsey’s guideline: your total monthly housing payment (principal + interest + property tax + insurance, i.e., PITI) should be ≤ 25% of take‑home pay.
  • This tool evaluates affordability under that rule and highlights whether your plan passes or exceeds the threshold.
  • If it exceeds 25%:
    • Increase down payment to reduce principal
    • Choose a lower home price
    • Consider a longer term for lower payment (trade‑off: higher total interest)
    • Shop rates and insurance to lower PITI
  • Ramsey favors 15‑year fixed loans: pros (faster payoff, less interest), cons (higher monthly payment). Use the rule to balance risk and cash flow.
What results will I see and how should I interpret them?
  • Monthly Mortgage Payment and whether it meets the 25% rule
  • Breakdown of PITI components and their impact
  • Guidance when failing the rule: practical actions to move below 25%

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