I'm now a home owner

[blinblue]

You have no idea what you're talking about. They payment differences are huge. For example on a $250k loan at 4% the payments over 30 years are $550 per fortnight, where over 15 years it's $850 per fortnight. That's a fucking huge difference to most people.

But interest rates are different for a 15 year and a 30 year. It's about 3% for a 15 year, 3.8% for a 30 year in the US.

So a $160,000 mortgage at 3% for 15 years is $1104.93/month. Over 15 years you will pay $38887.51 in interest

A $160,000 mortgage at 3.8% for 30 years is $745.53/month. Over 30 years you will pay $108391.43 in interest.
If you pay extra on your 30 year and pay it off in 15 years, you would have to pay $1167.53 a month and spend a total of $50155.19 in interest.

So the cost of having the cushion ($1104.93-$745.53=$359.4 a month) that the 30 year provides is about $750/year for 15 years.

If you know that you can make the payments for a 15 year then you can save $750/year

 

[alkemyst]

well and true but the 15 year rate is usually at a good discount to the 30 year rate.

not really so much. The 15 year payoff is the discount.

 

[alkemyst]

But interest rates are different for a 15 year and a 30 year. It's about 3% for a 15 year, 3.8% for a 30 year in the US.

So a $160,000 mortgage at 3% for 15 years is $1104.93/month. Over 15 years you will pay $38887.51 in interest

A $160,000 mortgage at 3.8% for 30 years is $745.53/month. Over 30 years you will pay $108391.43 in interest.
If you pay extra on your 30 year and pay it off in 15 years, you would have to pay $1167.53 a month and spend a total of $50155.19 in interest.

So the cost of having the cushion ($1104.93-$745.53=$359.4 a month) that the 30 year provides is about $750/year for 15 years.

If you know that you can make the payments for a 15 year then you can save $750/year

that's the rub brah.

most can't and go down that rabbit hole.

It's like those that try and cheat their bank (overdrafts), the IRS (penalties), etc. The common fodder eats them alive in late payments and fees.

If you are a 1%er, carrying a mortgage is a safe bet.