Why Is Paying Off My Mortgage Better Than Investing?

Summary

Ramsey Everyday Millionaires: "Why Is Paying Off My Mortgage Better Than Investing?"

Date: February 2, 2026
Hosts: Dave Ramsey, George Kamel, Dr. John Delony (attributed as A and C)
Caller: Chris from Lima, Ohio

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Episode Overview

This episode dives deep into a common financial crossroads: should you pay off your mortgage early or invest extra money for potentially higher returns? The conversation is sparked by a caller, Chris, who shares advice he's received from a traditional financial advisor and seeks the Ramsey Network’s take. Throughout, the hosts emphasize the importance of peace and security over chasing maximum ROI, while debunking the purely mathematical argument for investing over debt repayment.

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Key Discussion Points & Insights

1. Chris’s Question: Math vs. Peace of Mind

• [00:18] Chris asks why paying off his mortgage early (with extra principal payments) is recommended over investing the same funds, if the "projected interest savings" from early payoff is much less than "projected interest gain" from investing.
• The hosts acknowledge the math: "If everything works out perfectly... the math works in your favor." (A, 01:03)
• However, they highlight real life is rarely perfect: job loss, economic instability, and life's unpredictability can upend projections.

2. The Real Goal: Solving for Peace, Not Just ROI

• Peace Over Profit:
  "I'm solving for peace. I'm not solving for maximum ROI on every penny in my life." (C, 01:46)
  The hosts argue owning your home outright provides psychological and emotional security that outweighs pure financial optimization.

• Neurological Connection to Safety:
  "I personally believe there's a neurological connection to safety. If your body knows they can take away your house... your brain would be failing you if it let you sleep at night." (C, 01:54)
  The implication: being debt-free, especially on your home, brings peace you can’t quantify.

• "Sleep Tax":
  Dr. Delony humorously coins, "I paid probably a 3% sleep tax, and it was worth every single penny." (C, 02:37)

3. The Industry’s Bias & Motivation

• Financial advisors are incentivized to keep clients invested:
  "Their whole job is to get you to invest. That's it. That's their entire job. They're not looking holistically at how you sleep at night, what's going on in your marriage." (A, 03:28)
  Delony doubles down: "They have a fiduciary responsibility to their firm... so yes, they have a vested interest in telling you you're stupid." (C, 03:42)

• Selecting an Advisor:
  "Get another financial advisor... somebody who will say, 'I want to do not what's best for me at your expense.'" (C, 04:36)

4. Financial Details & the Bigger Picture

• Investment Assumptions Are Flawed:
  Compounding for investments isn't apples-to-apples with mortgage interest because of how mortgage interest is frontloaded.
  "You're misunderstanding how interest is calculated on that mortgage. It's essentially front-loaded." (A, 05:48)

• Balanced Approach:
  The Ramsey method advocates always investing 15% of your income for retirement before putting extra money towards the mortgage.
  "We've said it. Always invest 15% before you put an extra dime on the mortgage." (A, 06:02)

• Opportunity After Payoff:
  Upon paying off your mortgage:
  "Then you've got $1,000 a month, month over month over month, for time eternal." (C, 06:35)
  This provides future investing power and cash flow.

• Clarity for Chris:
  Chris’s numbers: $183k balance, $700 extra/month, $71k interest savings, $196k possible investment growth— but the conversation emphasizes the non-mathematical benefits.

5. Optimization vs. Brain Space

• Wealth Is Inevitable, Optimization Marginal:
  "You're going to be a multimillionaire just the way you've been talking... Will you have five million or five and a half million? That’s really what we're talking about here." (A, 06:48)

• Psychological Freedom:
  "You know how many times I've thought about my mortgage interest rate of none? None at all. It has freed up my brain space to focus on what really matters." (A, 07:01)

• Control What You Can:
  "I like to control the controllables... I know what my interest rate is. I know I can pay it off, and that's something I can control. I don't know what the markets are going to do." (A, 07:44)

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Notable Quotes & Memorable Moments

• "I'm solving for peace. I'm not solving for maximum ROI on every penny."
  —Dr. John Delony (C), 01:46

• "I paid probably a 3% sleep tax, and it was worth every single penny."
  —Dr. John Delony (C), 02:37

• "Their whole job is to get you to invest... They're not looking holistically at how you sleep at night, what's going on in your marriage."
  —Host (A), 03:28

• "Get another financial advisor... who will say, 'I realize I’ll make more money as a business over time if I do what’s best for you and your family.'"
  —Dr. John Delony (C), 04:36

• "You're misunderstanding how interest is calculated on that mortgage. It's essentially front-loaded."
  —Host (A), 05:48

• "You're going to be a multimillionaire... will you have five million or five and a half million?"
  —Host (A), 06:48

• "It has freed up my brain space to focus on what really matters."
  —Host (A), 07:01

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Timeline of Key Segments

• 00:18–01:46 — Chris’s main question, hosts establish the 'math is only part of life' angle
• 01:46–02:40 — Psychological & security benefits of paying off the mortgage
• 03:00–03:56 — Industry incentives, advisor bias, and fiduciary conflicts
• 05:22–06:26 — Crunching Chris's numbers, technical differences between mortgage interest and investment growth
• 06:35–07:30 — Long-run benefits: cash flow, peace, and the importance of brain space

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Conclusion

The episode firmly argues that while math can favor investing, achieving genuine peace, security, and autonomy—especially by owning your home free and clear—is a value that transcends numerical optimization. The hosts encourage listeners to control what they can, choose advisors who put the client first, and to prioritize peace of mind alongside financial growth.

Final message:
"We are rooting for you to solve for freedom, my friend." (A, 07:44)

Transcript

[A]

This episode is brought to you by SmartVestor. Connect with an investing pro near you at RamseySolutions.com SmartVestor Chris is going to kick us off in Lima, Ohio. What's going on, Chris?

[B]

Hey, gentlemen. Good to talk to you. So quick question, please. Speaking with another financial advisor, I got some input, and I want to know why is it better in your point of view, to pay off my mortgage early with extra principal payments, when the projected interest savings by doing that is significantly less than the projected interest gain of investing those extra payments?

[A]

I wish we were all robots and math is all that mattered, Chris. I really do, because this would be a much easier answer, and I don't think you're going to like my answer, and I don't think you're going to pay off your mortgage early.

[C]

But hey, can we just say, let's walk through it all things told, if everything works out perfectly, you are correct. And hopefully that, like, if you never.

[A]

Have a job loss, you never have a divorce, everything works out great and the markets continue to soar.

[C]

That's right.

[A]

Yes.

[C]

Everything is perfectly stable in the financial markets these days. And with everyone's all. All in on the same leadership. So we, we're going to just go with that because everyone's pretty comfortable right now with. With everything. Right. So assuming all that works out right, you actually are correct. The math works in your favor. And that's where I, at least me personally, and I know George is too. We're playing a totally different game. The game is I want to be at a place where nobody, no government, no people, no bank, no mortgage company, nobody can take away me and my family's home.

[B]

Sure.

[C]

And so I'm solving for peace. I'm not solving for maximum ROI on every penny in my life. There is places where I try to solve for maximum roi. Having a house that nobody can take away from me. I. I personally believe there's a neurological connection to safety. If your body knows they can take away your house, if you lose your job, if you lose anything for any reason in this world where you can get canceled overnight for something you post, if you go to the wrong Coldplay concert, your life is over. Right. Like, whatever's happening, there's so many outside factors that can take your life away from you. Your brain would be failing you if it let you sleep at night. And so as for me and my house, we opted out of that ROI game on that particular math problem and said, I want to solve for peace. And so when I was paying my mortgage off I paid probably a 3% sleep tax, and it was worth every single penny.

[B]

Okay, that makes sense. Can I have one more question?

[C]

Do you have time and I talked over. George. George, what do you think?

[A]

Yeah, I want Ask your question. I want to hear your numbers to kind of get a lay of the land here.

[B]

Yeah, I can give my numbers. My other question quickly was just, when you get. When I get to that point of the 15% investment in retirement, does that include employer match, or is that just my contribution?

[A]

That's regardless of employer match. So you do 15% of your own money, and whether the employer matches 0% or 10% doesn't change that you've invested 15% of your income.

[B]

Okay, perfect.

[C]

Can I ask you a question back, brother?

[B]

Yeah, you can, sure.

[C]

Was that your question, or was that your financial advisor's question?

[B]

Yeah, you caught me. I want to do it the Ramsey way. And they're fighting me with numbers, saying, well, you realize you're giving up all of this, gained interest, right?

[A]

Their whole job is to get you to invest. That's it. That's their entire job. They're not looking holistically at how you sleep at night, what's going on in your marriage. And so that's where I think it's sort of a. It's a question in a vacuum.

[C]

Well, it's not. I don't think it's a vacuum. They have a fiduciary responsibility to their firm to make as much money as possible, and they probably have some sort of commission triggers on how much money they can get in the door. So, yes, they have a vested interest in telling you you're stupid.

[A]

So what you're saying is, hey, I'm going to liquidate my portfolio with my advisor in order to pay off my mortgage, which means he just got a pay cut. Think about that.

[B]

And that paid you guys nothing today, right? As you said in the intro, we get.

[A]

We get no kickback for telling you to pay off your mortgage or to invest. So I want to tell you that we are unbiased in that regard other than wanting you to be free.

[C]

I'm biased in this way. I'll tell you where I have a bias. I have a bias in looking around at our world and our culture, and everybody's insane. And I will tell you that when I call George on a Saturday morning when I'm trying to work out a math problem, George gives me an answer. And he's not insane. He's insane about other things. Make no mistake. But, like, there is a level of peace, that I have a bias towards that. I wish everyone in this culture would lean towards being people of peace, not people of. Dude, how do we snap into a Slim Jim and maximize our. Because that's making everybody insane. And that's the world my children are inheriting. And I'm sick of it, man. And so I'm gonna tell you right now, bro, get another financial Advisor. Go to ramseysolutions.com and you can click on Ramsey trusted and find somebody who will say, hey, I want to do not what's best for me at your expense. But I realize I'll make more money as a business, as a financial advisor over time if. Stay with me. And you'll stay with me if I do what's best for you and your family. Okay, that'd be. That'd be my recommendation.

[A]

Can I hear your numbers, Chris?

[C]

Yeah, go ahead.

[B]

Y. I have a loan balance of 183k.

[A]

Okay.

[B]

And if I paid, I was throwing out 700 bucks extra a month. My savings and interest is about 71,000. And if I were to invest that 700amonth, just assuming that the interest rate is the same as my house, which is four and a quarter, and I have no other investment, which I do, but assuming it, I'm starting at zero. The growth is 196k.

[A]

But you're misunderstanding how interest is calculated on that mortgage. It's essentially front loaded. And so if you go to see how much you're actually paying in interest this month, you will be baffled to go, oh, my God, I didn't make that in my savings account.

[B]

Right.

[A]

Even with the same amount of money in there. And so that's. It's not apples to apples, number one. Number two, we're also assuming that you're not doing any investing while paying off your mortgage, which is something we've never said to do. We've said it. Always invest 15% before you put an extra dime on the mortgage. Which means. How old are you, Kris?

[B]

32.

[A]

You're 32 years old. So let's forecast this out. What is your principal and interest on your mortgage today?

[B]

It is. It's like 955.

[A]

Okay. So about 1,000 bucks right now is what you would free up if you paid off your mortgage early, which then you have the ability to invest for the rest of your life.

[C]

That's the other part of your calculation that you're missing, is if you pay your house off in three years or four years, then you've got $1,000 a month, month over Month over month over month, for time eternal.

[A]

So the real question is, here's the thing. You're going to be a multimillionaire just the way you've been talking now, will you have five million or five and a half million because you did or didn't pay off your mortgage early? That's really what we're talking about here.

[B]

Sure.

[A]

So that's the optimization part. But the fact that you've burned this many brain calories on it tells me it's just pay it off. You know how many times I've thought about my mortgage interest rate of None. None at all. It has freed up my brain space to focus on what really matters. And that's the part that's hard to explain in a radio call. Sure is the brain space it frees up to not even think about monitoring one more account and arbitraging and making sure that my investments and savings are doing better than my mortgage savings are.

[C]

And you have to stay glued to the next thing that the President tweets out or that the markets are doing or that the. What's the tariff in this? Like, you have to stay glued to that because you have to. You have to make that spread versus I don't. I don't know. I don't have a mortgage.

[A]

I like to control the controllables and I like to control the knowns. And I know what my interest rate is. I know I can pay it off, and that's something I can control. I don't know what the markets are going to do. I don't know if I'll have a job forever to be able to pay the mortgage. And so that's why I decided to pay off mine early. I hope you do the same. Chris, we're not trying to beat you down. We're having a fun conversation. But we are rooting for you to solve for freedom, my friend.