Money and Ministry: Should Churches use Mortgages?

Historic Church

Your church membership is growing, and with growth comes the need to expand your physical facilities, or even move into a new building altogether. So, is it a good idea for your church to take out a mortgage in order to make that jump?

It’s commonplace for organizations in our society to borrow money when they take on new building projects. Much like individuals take out personal mortgage to buy their family homes, many companies and organizations take out corporate mortgages to buy new property or expand their facilities. But just because something is commonplace doesn’t mean that it makes good sense.

We’ve discussed recently how important it is for churches, ministries and non-profit organizations to manage their money according to God’s principles of financial wisdom.  For churches, taking out a big loan to finance a building purchase or a construction project can seem like a great, immediate solution to the issue of growth. We know from scripture, however, that debt is slavery, and we’ve seen how debt has killed great ministry organizations. So, is it advisable for churches to use mortgages to expand?

No. While mortgages sometimes seem like “good” or “safe” debt, in the case of a church, they can actually weigh the organization down. And although home mortgages make sense for individuals and families, borrowing hundreds of thousands (or even millions) of dollars has very different ramifications for churches.

There are some key factors in church finance and dynamics that make mortgages dangerous. Here are some important reasons to steer clear of them:

1) Decreased flexibility

When your church takes on debt, it locks a monthly payment into your organization’s budget that can not be changed or altered. And while it may seem like no big deal to make that payment now, consider the fact that things like church attendance and giving can be notoriously fickle. Though we all want our churches to grow, some churches don’t have constant growth. In fact, many churches shrink over time, and almost all churches experience decreased giving in tough economic climates.

Although individuals often have incomes that are fairly predictable over time, a church’s income is heavily susceptible to outside forces. If you take out a mortgage and your attendance or giving go down, that payment that was once affordable can suddenly become back-breaking and threaten to wipe you out financially. On the other hand, staying debt-free gives you the flexibility to react to your financial circumstances and keep your organization healthy during lean times.

2) Resale troubles

One of the reasons that it’s okay for individuals to take out  mortgages on their homes is the residential real estate market is fairly fluid — if you mortgage with wisdom and keep an eye on your financial circumstances, you can usually sell your home and escape debt-free if you need to. That’s because a home that serves your family well will probably serve another family well too, so the values of homes stay fairly constant (and even increase in good times).

But this proposition is much trickier for churches. You see, church buildings are usually suited for just one purpose — to hold churches. Though there are probably hundreds or thousands of families in your area shopping for homes, there aren’t nearly as many churches looking to buy facilities like yours. That means that if you get into financial trouble, it will be much, much harder to sell your church building than it is to sell your personal house. And even if you do manage to sell, you may not get nearly the amount of money that you put into the property when you first built or bought it. That leaves you open to the danger of church bankruptcy.

3) Perpetual opportunity

One of the reasons that it makes sense for individuals to buy homes with mortgages is that they have limited time in life, and certain financial needs are most prescient at certain points in life. It could take an individual decades of adult life to save enough cash to buy a home outright, but couples often have families that need homes long before they’ve saved that kind of money. By taking out mortgages, people can get into homes when they need them. In fact, buying a home early in life can be a good thing, because appreciation allows you to build equity quickly, enabling you to buy better houses as you get older.

For churches, however, these time limitations aren’t compelling factors. Churches don’t have the limited life spans that humans do — they can go on in perpetuity. In fact, we want our churches to continue operating and thriving until Jesus returns. This means that there’s no hurry to get into a new church building, because churches don’t have the same time-sensitive needs that individuals and families do. And because it’s debatable how much appreciation and equity will help a church, there are few upsides to taking out a mortgage to get into a property quickly.


Any time you borrow money, you add risk to your life. For individuals, the risk that comes with mortgages is largely offset by the benefits of owning a home, and that risk can be mitigated by using wise purchasing practices. For churches, though, taking out a mortgage poses a bigger risk than it does to individuals, and there are fewer benefits. In this case, we don’t believe that the benefits are compelling enough to make it worthwhile to risk the financial future of your church on a building.

It can be tempting to think that mortgaging to buy a building is the only way to handle your church’s growth, but that’s simply not true. You can rent facilities, hold multiple services or find other creative solutions to handle your growing congregation until your organization has raised the money it needs to buy a new place. When you do buy or build, you should start small, purchasing a facility that you can pay cash for, and then look to expand that facility as your church grows in the future.

Above all else, remember this: A church isn’t a building, but a group of people. The healthier your finances are, the better you can serve that group of people, and the more opportunity there is for growth. Don’t let a risky building “investment” threaten your church’s true assets.


Photo by Dan Valentine. Used under Creative Commons License.

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