Here’s what we ended up going with ;)

https://eliteedgemoney.com/15-vs-30-year-mortgage-debate-answer/

I too have to say go with the 15 year. When I had a $20k personal loan I went with the longest possible term for those “just in case” moments we all seem to have. However, I was able to pay it off 15 months early. Life is just so unpredictable.

If I could use a time machine, I would go back and have started saving at age 5. Now if I could just find a Delorean or a Quantum machine like on Quantum Leap I’d be all set. Oh boy. ;)

Always great to read your stuff!

Miriam

I trust you! Haha… You’ve been on this Earth longer than I :)

FWIW – I pulled S&P data for the last 65 years, and calculated the cumulative returns for each possible 15 year period. The CAGR for 24 of the 50 period was over 10%, the next 6 best period were 8-10%. There were only 5 periods that were under 5%, with the lowest 2 returning 4.2%.

If a casino offered you these odds, 50% chance of ‘jackpot’ (the middle scenario shows a mortgage balance of $180K at year 15, but ‘savings’ of $285K) a 40% chance of a nice return, and just a 10% chance of breakeven to being down a tiny bit (due to order of returns, the 5.4% CAGR for the 15 year period failed in 2011, with a 20K shortfall, but with patience, 2012/2013 put the strategy spectacularly in the black by over $60K.

Note – I used your 2 mortgage rates for 15 and 30 year loans at the $280K you stated. I ignored tax savings on interest, because that would add a layer of complexity I really didn’t need to prove a point, although if you took the deduction, 22% (?) would really make even that worst case scenario positive. I can send the spreadsheet over, just need to fill in how I did some of the math.

And I appreciate those two cents!

This is very interesting to hear, especially as I saw it going a lot differently than you ended up saying, haha… I’m glad you’ve stuck with it and are at peace with the decision! That’s all you can hope for! And I agree it’s a worth *challenge*, especially if you don’t trust yourself to make extra payments :)

Thank you for taking the time to share today – and I pray your diagnosis was indeed a blessing and you do have many decades left to enjoy this soon-to-be-mortgage-free-life! Haha… That would be amazing!! :)

Happy Easter.

It’s been super-tight, as I am single, but I try to keep my mind on the fact that I will own the home free and clear in 7.5 years! Somehow I’ve done it this far, and I’m determined to tough it out. If I’m still stuck with a little credit card debt at the end, so be it (as long as it’s 0% and I’m just paying the balance transfer fees now and then).

I need to mention the fact that I am 54 years old. I really want to own my home completely before I am dead. The thought of being able to keep that extra $1,400 a month makes me giddy (I will still have to pay $350-500 in taxes and insurance, but who cares?)

So my advice probably wouldn’t apply to you, since you have a young family with lots of time to make personalized decisions. I think it would make sense to go with the 15-year if you are planning on staying in that house for a long, long time, and having your kids grow up there. Then do you sell it and pay cash outright for a smaller house when your kids go to college? Sounds good to me!

I also know myself, and know I am not disciplined enough to put extra money towards a 30-year mortgage to make it shorter. Things would keep coming up that I feel I would need to pay for, and there would never be enough extra left. So, though this is really hard for me, I’m doing my damnedest to stick with it.

There are also home equity loans, or even the credit card if the amount small enough, to fall back on in an emergency so I can keep on pace to pay the home off in time.

Just my two cents…

Thanks Joe!

Shaping up to be an interesting adventure already, haha…

And at least getting some new blog fodder off it! ;)

We’ll see about the mortgage stuff though… I’m still not convinced either way, so it might just be a matter of what my wife is more comfortable doing in the end… still need to have “the talk” with her – hah.

If inflation come back, you will pay the mortgage with cheaper dollars. Wouldn’t it be great to owe $250K at sub – 4% while ‘getting’ 5-6% in the bank? But. If we have another bad recession, you might refi even lower.

Congrats on this next chapter of your life, Jay!

Oh good!

Great timing indeed – I hope it goes smoothly for you!

Thanks for chiming in! :)

For me I think it would depend mostly on the % that is offered. I am in the proccess of moving house and have accepted 2.04% for 5 years fixed, so was happy to take that on a 21 year (random number I know) mortgage. With your situation between 3.17% and 3.94%, 15-20 years wins every time! Each to their own but I think if I took the 30 saying I would overpay, this leaves a lot to our complicated brains to come up with excuses for not doing it. That maybe returns in the market are more appealing.

I was debating with the Mortgage Advisor over different companys to shave off every 0.1% I could. Kind words of wisdom for everyone, but the cheapest deal on the list paid a lot less off the mortgage and would cost me more in the long run, though cheaper for those 5 years.

Loved this as it is very relevant to my life right now.

Cheers.