House payment 25% rule
Ramsey's guideline is that a mortgage payment should be no more than 25% of take-home pay, giving room to save, invest, and be generous without becoming house poor.
Where this was said
Caller: House Payment Is 50% of Income — Should We Sell?
At 22:47 · chapter starts 21:21
Braxton and his 26-year-old wife are almost debt-free — $3,000 on a credit card being paid off next paycheck, student loans already cleared — but their $4,600 mortgage looms large against a perceived $11,000 take-home. Dave corrects the math: because their 401(k) and health insurance contributions come out pre-paycheck, their true after-tax take-home is closer to $13,000, dropping the housing ratio from 42% to about 35%. [1] — Dave Ramsey "House payment 25% rule: Ramsey's guideline is that a mortgage payment should be no more than 25% of take-home pay, giving room to save, inv…" 22:47 Still above Ramsey's 25% guideline, which Dave calls the 'house poor' threshold, but not catastrophically so. Rachel notes they should have roughly $7,000 left each month after the mortgage, which Braxton confirms. Dave's prescription: stick to the EveryDollar budget, and never let a car payment or emergency borrowing undo the progress they've made.
House Poor at 26: Is Your Mortgage Killing Your Financial Future?
A 26-year-old couple with an $11,000 take-home and a $4,600 mortgage payment sounds dire — until Ramsey recalculates their real take-home at $13,000, dropping the ratio from 42% to about 35%. Still too high by the 25% rule, but manageable if they avoid car payments, credit cards, and lifestyle creep. Discipline now or a mess later.
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