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Debt is one of the most debated topics in church leadership. Should we take on debt to build a facility? Should we strive to be completely debt-free? How do we balance faith, wisdom, and financial responsibility?
These are big questions. And if you’ve ever sat in a finance committee meeting where someone says, “If we didn’t have this monthly mortgage payment, we could fund so much more ministry,” then you might already know what it feels like to have borrowed too much.
A couple of observations before we start. First, being debt free is not necessarily the sign of a healthy church. I know a lot of churches that are debt free and not effective for the gospel. They are in decline or dead. So, let’s not make debt free the litmus test for a healthy church.
Second, the Bible doesn’t specifically prohibit debt, it speaks to the wisdom of having debt. The main teachings about debt are in Proverbs, which is wisdom literature, not law.
With that in mind, let’s talk about healthy debt, unhealthy debt, and how to ensure your church’s financial decisions fuel your mission rather than hinder it.
The Two Types of Church Debt
Not all debt is created equal. Some debt can be strategic, while other forms can cripple a church’s ability to thrive.
Unsecured Debt (Consumer Debt) – This type of debt (credit cards, loans without collateral) is dangerous for individuals and churches alike. Fortunately, most churches don’t accumulate this kind of debt.
Secured Debt (Mortgage Debt) – This is the typical debt churches take on, backed by the church’s building and property.
Biblically, debt becomes a problem when it presumes on the future—when a church takes on more than it can realistically sustain.
The key question to ask:
💡 Is this debt positioning us to expand God’s work, or is it limiting our ability to invest in ministry?
How to Know If Your Church Has Borrowed Too Much
A guiding principle I’ve observed from working with churches across the country is this:
✔️ If your total mortgage debt is around 1x your annual income, you’re in a safe zone.
⚠️ If your mortgage debt exceeds 1.5x your annual income, you’re entering a potentially risky zone.
❌ If your debt reaches 2x your annual income, you’re likely sacrificing ministry impact to service debt.
Here’s the reality: Just because you can make the payments doesn’t mean you can afford it.
A church’s two biggest fixed costs are:
Staffing costs (typically 45–50% of budget)
Facility costs (mortgage, maintenance, utilities)
If these two categories eat up 85-90% of your church’s income, then you are left with only pennies on the dollar to fund actual ministry. That’s a problem. It needs to be 80% or less.
Should Your Church Prioritize Paying Off Debt?
Many churches wrestle with this:
Do we take on more debt to expand our facilities?
Do we pause expansion and aggressively pay down debt?
How do we balance faith and financial wisdom?
Here’s a simple way to frame it:
💡 Instead of just saying, "Let’s pay down debt," cast a vision for doing more ministry.
Example:
👉 “If we cut our mortgage payments in half, we could reallocate $X per month to plant churches, increase outreach, or fund new discipleship programs.”
Church members don’t get excited about balance sheets. They get excited about kingdom impact!
What If Your Church Is Already Overextended?
Many churches today face rising mortgage payments due to interest rate hikes. If your church finds itself in a tough spot, consider these steps:
✅ Assess your debt-to-income ratio – Where do you fall in the 1x, 1.5x, or 2x range?
✅ Consider a debt-reduction initiative – Framing it around mission impact, not just financial relief makes all the difference.
✅ Increase financial transparency – Regularly share financial updates with your congregation so debt doesn’t become a “hidden burden” that shocks members later.
Final Thought: Debt Is a Tool, Not a Master
Debt itself isn’t wrong—but it should never dictate a church’s ability to fulfill its mission. The key is wise stewardship.
A healthy church finances its mission first, not its mortgage. The moment debt starts forcing tough decisions about cutting ministry programs, it’s time to recalibrate.
So, what’s the next step for your church? If you’re in a finance meeting wondering if debt is helping or hindering your ministry, it’s time for an honest conversation. If you’re considering a major financial decision, pause and ask:
💡 Are we borrowing in a way that aligns with God's calling, or are we borrowing beyond our capacity to give and grow?
Let’s steward God’s resources well—for today and for the future.
Find out more about How Debt Impacts Your Church's Mission on the Next Sunday Podcast.