Dave Ramsey's mortgage payoff calculator
Dave Ramsey’s rule says pay off the mortgage early. JMM’s mortgage payoff calculator runs it on your loan: payoff date, interest saved, and investing instead.
Dave Ramsey Reviewed Aug 6, 2026 Rule located in Ramsey Solutions, 2026 Portrait: Gage Skidmore, CC BY-SA 3.0, via Wikimedia Commons. Self-hosted by JMM.
Put your numbers through the rule
The source establishes the rule. The values below belong to you, and the output is JMM's deterministic calculation.
Every field recalculates immediately. Changed values can be copied into a shareable URL.
- Interest saved
- $124,861
- Scheduled monthly payment
- $2,047
- Same extra invested instead
- $382,843
- Interest still paid
- $218,361
Interest saved is a certain, tax-adjusted-free return equal to your mortgage rate. The invested comparison is a scenario at the rate you entered and carries risk the payoff does not.
On schedule
- Payoff
- 324 months
- Interest
- $343,222
With extra payments
- Payoff
- 221 months
- Interest
- $218,361
Invest the extra instead
- Horizon
- 324 months
- Scenario value
- $382,843
What the source says, and what the calculator adds
Source-supported ruleRamsey Solutions treats early payoff as Baby Step 6 of its plan rather than an option, and puts numbers on it: one extra payment a quarter is described as paying off the article’s example loan 14 years early and saving $160,000 in interest. 
JMM calculationJMM amortizes the loan twice from your own balance, rate and remaining term — once at the contractual payment and once with your extra principal on top — and prices the other side of the argument by compounding the same extra payments at a return you choose. 
What changes the answer
Interest saved is a certain return at your mortgage rate
Every extra dollar of principal earns exactly your interest rate, with no volatility and no sequence risk. That is the strongest argument for the rule and the one the comparison column has to beat, not merely match.
What each extra $100 a month buys on the default loan
On the loan loaded below ($320,000 at 6.25% with 27 years left, $2,047 a month scheduled), an extra $100 a month ends the loan 35 months early and saves $44,366 in interest. An extra $400 buys 103 months and $124,861; $800 buys 154 months and $180,681. Early principal removes the most expensive months at the front of the schedule, which is why the first $100 buys more time per dollar than any later one.
At 3% this is a bad trade. At 7% it is close. The certainty is worth more than most spreadsheets admit.
The arithmetic case against paying off a cheap mortgage is real: if the loan costs 3% and a diversified portfolio is expected to return 7%, sending money to the lender is a choice to earn less. But the two returns are not the same kind of object. One is certain, immediate and unaffected by what markets do next; the other is an expectation with a wide distribution and a tax bill. This calculator shows both, side by side, on your numbers. JMM would not accelerate a sub-4% mortgage. Above roughly 6%, once you have taken the employer match and filled the tax-advantaged accounts, the certain return starts winning on merit and not just on feelings. And the feelings count: a paid-off house lowers the income you need to survive a job loss, which is a real reduction in risk that no return comparison prices.
Not the calculator’s limits. The rule’s.
It puts the house ahead of accounts you cannot backfill
Tax-advantaged contribution room does not roll forward. Extra principal in your forties is a permanent trade of that room for interest saved, and the rule’s ordering never revisits it.
Home equity is the least liquid asset you own
Money paid into the mortgage is only accessible by selling or borrowing against the house, and borrowing against it is hardest precisely when you need it. A larger cash reserve and a slower payoff is often the safer combination.
The advice was written for high-rate mortgages
The framework predates a decade of 3% loans. Applied to one of those, it converts a genuinely cheap liability into a guaranteed underperformance, and the rule contains no rate at which it stops applying.
What this model does not know
- Property tax, insurance, HOA and PMI are outside the loan and are not modeled.
- Prepayment penalties, servicer rules about how extra payments are applied, and recast options vary by lender and are excluded.
- The invested comparison ignores taxes, fees, and the fact that its return is uncertain while the interest saved is not.
- The invested comparison includes the payments themselves and runs the full scheduled term, while the payoff path stops early and its freed monthly payment is not reinvested.
- Mortgage interest deductibility is not modeled and changes the comparison for households that itemize.
Before you use the result
Should I pay off the mortgage or invest?
Compare the certain return, which equals your mortgage rate, against the return you would actually accept as an expectation net of tax. On the default loan, $400 a month at the 7% scenario grows to $382,843 over the 27 scheduled years, against $124,861 of certain interest saved at 6.25%, but the two are not the same kind of number: the invested total includes the $129,600 of payments themselves and keeps contributing for 103 more months than the payoff path’s extra payments run, and this model never reinvests the $2,447 a month the finished loan frees. The invested figure also carries market risk and tax that the saved interest does not; the mortgage payoff vs invest calculator linked below runs the same trade after tax.
Is this Dave Ramsey’s own mortgage payoff calculator?
No. It is JMM’s independent model of the rule stated in the cited Ramsey Solutions article: the source establishes the recommendation, the loan numbers are yours, and the calculation and the invested comparison are JMM’s.
Does an extra payment always go to principal?
Not automatically. Some servicers apply extra money to the next scheduled payment instead. It has to be designated as a principal reduction, which is the one operational detail this model assumes you have handled.
Is the invested comparison a JMM forecast?
No. It compounds the same extra payments at whatever rate you enter, over the months the mortgage would otherwise have run. Change it and the comparison changes.
The next question this page cannot answer
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Calculator Mortgage payoff vs invest calculator The trade this rule refuses to make. Same extra payment, compared against investing it at a rate you choose.
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Calculator Refinance break-even calculator The other way to cut lifetime interest, and the month at which its closing costs are repaid.
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Dave Ramsey, sourced rule 25% house rule calculator The purchase-side rule from the same publisher, whose 15-year term is what makes this payoff step reachable.
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Dave Ramsey, sourced rule Debt snowball calculator Baby Step 2 before Baby Step 6: the same publisher sends every non-mortgage balance through the snowball before an extra dollar reaches the house.
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