Should You Pay Off Your Mortgage Fast Like Dave Ramsey Says? A Florida Investor’s Perspective (2025 Update)

Note: This is the 2025 version of a video where I discussed Dave Ramsey’s advice about paying off your mortgage. Back then, rates were at historic lows around 2.5%. Today, with interest rates closer to 6.5%, the conversation looks very different. Let’s dive into the updated perspective.

When Dave Ramsey Speaks, People Listen

Dave Ramsey has a way of making money sound simple. He’s like that uncle at Thanksgiving who bangs the table and says, “If you just do this one thing, your life will change forever.”

And for millions of people drowning in debt, his advice works. He cuts through the noise: live below your means, save aggressively, pay off your debt as fast as possible, and avoid risk.

But what happens when his one-size-fits-all advice — “pay off your mortgage as fast as possible” — lands in the lap of a real estate investor?

That’s the question my best friend asked me a few years ago. He had just gotten a 30-year mortgage at 2.5%, and Dave told him to throw every dollar at it, pay it off in seven years, and live debt-free.

On the surface, it sounded clean and safe. But was it smart?

Fast forward to 2025, and now rates hover around 6.5%. That old video has a whole new meaning. Let’s unpack it.

Why Dave Ramsey Tells You to Pay Off Your Mortgage

Dave’s philosophy is built on safety:

• Debt = risk

• No mortgage = peace of mind

• No monthly payment = more money for living and giving

For families who don’t want to mess with investing, this is solid advice. Imagine being 40 with no house payment. That’s freedom. You don’t have to worry about job loss or the bank calling your loan.

For many households, that dream is worth everything.

But here’s the problem: not everyone is just a household. Some of us are investors.

The 2.5% Era: Why Paying Off Early Made No Sense

If you had a mortgage at 2.5%, you were holding gold. With tax deductions, the real cost could dip closer to 1.5%.

So why would you rush to pay that off when you could easily earn more elsewhere?

Let’s do the math:

• $200,000 mortgage at 2.5% = $5,000 yearly interest

• $200,000 invested in rental property earning 8% = $16,000 yearly return

That’s an $11,000 difference every single year. Over ten years, that’s $110,000 — not even counting appreciation or rent increases.

Paying off a 2.5% loan early was like selling a Ferrari because you didn’t want to pay for gas. Sure, it’s cheaper, but you’re not going to get very far.

The 2025 Reality: Why 6.5% Changes the Game

Now let’s jump to today. The average 30-year fixed mortgage sits around 6.5%. That’s a very different situation.

• At 6.5%, your debt is much more expensive.

• The gap between what you pay on your mortgage and what you could earn investing elsewhere is smaller.

• If your investments don’t beat that 6.5% hurdle, debt payoff might actually be the smarter move.

So while I would never recommend racing to pay off a 2.5% loan, a 6.5% loan deserves a closer look.

Peace of Mind vs. Growth of Wealth

Here’s the real decision every homeowner faces:

• Option A (Ramsey’s Way): Pay off your mortgage fast, sleep easy, no debt.

• Option B (Investor’s Way): Keep the mortgage, put money into investments, grow faster — but accept more risk.

Neither option is “wrong.” It depends on your personality and your financial education.

If debt keeps you up at night, pay it off. If you know how to analyze deals and stomach some risk, investing often beats early payoff.

A Florida Case Study

Let’s look at a Florida example, since this is my backyard.

2020 Scenario (Low Rates)

• House in Tampa bought for $250,000 with a 2.5% loan.

• Instead of prepaying $2,000/month, you use that money for a down payment on a duplex in St. Pete.

• Five years later, the Tampa house is worth $400,000, and the duplex is worth $350,000.

By leveraging cheap debt, you doubled your assets.

Meanwhile, your neighbor who followed Dave’s plan is debt-free but only owns one house.

2025 Scenario (High Rates)

• Same purchase today, but your loan is at 6.5%.

• Cash flow is tighter, and the duplex might not throw off $500/month like before.

• Now the decision is less obvious. Paying off a 6.5% mortgage could actually give you a guaranteed return equal to your interest rate — something you can’t always get in today’s market.

The Tax Angle

Another piece most people miss:

• Mortgage interest is tax deductible.

• A 2.5% mortgage could effectively be closer to 1.5%.

• A 6.5% mortgage, even with deductions, is still costly — maybe 5% or more after taxes.

The higher the rate, the stronger the case for debt payoff.

Risk Factors

Investing instead of paying down debt comes with risks:

• Vacancies eating into your cash flow.

• Property taxes and insurance skyrocketing (something Florida investors know all too well).

• Market downturns shrinking your equity.

• Refinancing at higher rates if the market shifts.

Dave’s plan avoids these risks. But safe also means slow.

My Friend’s Middle Road

My best friend, who inspired this whole debate, didn’t go all in on Dave Ramsey’s advice. Instead, he split his strategy:

• Paid down his mortgage faster than scheduled.

• Used the rest of his savings to buy cash-flowing rentals.

That balance gave him both peace of mind and growth.

Florida Investors Need a Different Playbook

Florida isn’t like every other state.

• The population is booming.

• Rentals are in high demand.

• Property values often outpace the national average.

Here, tying up every dollar in mortgage payoff could mean missing golden opportunities. Liquidity is power in Florida’s fast-moving market.

Practical Takeaways

1. If you locked in a 2.5% loan years ago: Don’t pay it off early. That’s some of the cheapest money you’ll ever borrow.

2. If you’re holding a 6.5% loan today: Run the math. If you can’t reliably earn more than 6.5% after expenses, consider debt payoff.

3. Always keep cash available. Don’t sink every dollar into your mortgage — emergencies and opportunities both need liquidity.

4. Mix strategies. A little extra toward the mortgage + steady investing can work well.

5. Know yourself. If debt stresses you out, it’s okay to pay it off. If you’re comfortable with leverage, keep building.

6. Florida factor. In a growth market, opportunity cost matters more. One dollar in debt payoff might cost you two in lost appreciation.

Final Thoughts

Dave Ramsey’s advice has changed countless lives, and for many households, it’s exactly what they need. But investors have to think differently.

• Back when rates were 2.5%, paying off early made no sense.

• At today’s 6.5%, it’s a closer call. The right answer depends on your financial goals, your tolerance for risk, and your ability to invest wisely.

Don’t just follow blanket advice. Run your numbers. Understand your market. And choose the path that fits you.

Keep it consistent, stay patient, stay true — if I did it, so can you. This is Jorge Vazquez, CEO of Graystone Investment Group and all our amazing companies, and Coach at Property Profit Academy. Thanks for tuning in — until the next article, take care and keep building!

If you’d like to connect directly with me, feel free to book a time here: https://graystoneig.com/ceo.

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