15 year vs. 30 year mortgage

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:But if I could confidently make more than 3% on my money, wouldn't it be a smarter investment to take out a 30 year loan, have a lower monthly payment, and invest the money instead in the stock market (again, only if I was sure to make more than 3%)?

First, explain how you can be "sure" you'll make any rate of return in the stock market? I have $1M in stocks, so I'm not anti-market, but there are certainly no guarantees.

Second, the point is to get rid of your mortgage, period. Pay it off as soon as you can. This is why I favor eliminating the mortgage deduction. People shouldn't be rewarded for paying interest.

Nonsense.

Look, if you can't make 3% per annum over 15 years, we're all going to have bigger fish to fry than your mortgage.

You're not a goldbug by any chance?

I agree it seems unlikely that you couldn't get 3% from investments, but far from impossible. If you look over history you will find 10 year periods of zero return. When you look at the size of the debt burden in the US and other advanced economies, the current elevated levels of profit as % of GDP, and the political polarization/obstructionism in Congress, it is not hard to make a case for very low returns over the next few years.

Also I think you have to realistically consider what you would do with the cash in the alternative. We probably would have been disciplined enough to save the $ and not let it get absorbed into the slush of other expenses, but chances are that we would not have been comfortable putting it in the stock market, and we decided that partly for psychological reasons and partly by comparing expected returns for alternative investments in the next 10 years, we wanted to put the money into the mortgage.