Step 6: Pay off Your Home Early


By the time you reach step 6, you should be debt-free (except for house payments), have a fully funded 3 – 6 month emergency fund, are regularly contributing 15% in retirement, and if you have kids, you should be portioning off some money for their college fund.

These are the prerequisites that are required before you can move onto Step 6: Paying Off Your Home Early. If Steps 1 – 5 are complete, it’s time to move onto Step 6!

Dave Ramsey’s 7 Baby Step Plan

Step 6 – Pay Off Your Home Early

This step may be the biggest “baby” step of them all.

Now, I haven’t personally done this as I’ve only ever lived with my mom or rented out an apartment. But, I do know that buying a home is most likely the biggest purchase, and in return the biggest debt, people carry.

Since you’ve gone through Step 2: Become Debt-Free, this is the only remaining debt you should have. It’s a financial behemoth but you’ve made it this far. You can put the tools and discipline you’ve learned to work.

Pay Off Your Mortgage Early

In this step, you’ll be paying off your home the same way you paid off your debt.

This means that any money left over in your budget after essential expenses will be put toward your mortgage payment.

To get and keep you focused in this step, I suggest creating a timeline that measures your starting point (how much money you owe on your house) and your finish point (a completely paid off home!).

It’s important to get these measures down and ingrained in your brain now. This way you can have a target to point your financial arrow at. Without a target, you’d be wandering aimlessly.

If there’s anything you’ve learned at this point is that you can’t prove progress if you can’t measure it. So take an hour to figure out what your mortgage timeline looks like.

Some common things to factor in:

  • Current mortgage payment
  • Interest rate
  • Estimated money you can afford to add to mortgage payment
  • Time it will take to pay it off

These are just the basics of what most people should consider. For a more comprehensive estimate, check out this free mortgage calculator.

Once you’ve got your timeline, find ways to translate that information into visuals that you can put on display so that you see it every day.

Take for example this $5,000 emergency fund.

It was drawn on a dry-erase board and can be markered in every time progress is made. It may seem a little silly for some, but it’s a mind trick that keeps you focused and stimulated on progress.

I personally find that these types of visuals help me to stay on track.

In addition to this, here’s a useful article I found on Dave Ramsey’s website: 7 Ways to Pay Off Your Mortgage Early. In the article, Chris Hogan (a Dave Ramsey associate) talks about making extra house payments, being frugal, refinancing, downsizing, buying a home cautiously, consulting a professional, and maximizing your down payment.

Since I don’t have any personal experience refinancing, downsizing, or buying a home, I suggest checking out his article for more ideas you may want to consider.

What’s Next?


According to Bloomberg, only about 37% of homeowners own 100% of the equity in their homes. Cheers to you being one of them.

At this point you are 100% debt-free!

Let me repeat…


What a wild ride it has been. I can only imagine the feeling of having everything, including a home, paid off completely.

I’m sure you must be feeling all sorts of emotions. And I’m sure your friends and family are proud of you. Surely, you’ve set yourself up as an example that if you put your mind to it, plan, and stay disciplined, you can achieve debt-freedom.

Now that you’re 100% debt-free, you can move onto the next step, Step 7: Build Wealth and Give.