Reply to Finance people: Help me figure out if a 30 year or 15 year mortgage makes more sense

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[quote=Anonymous][quote=Anonymous]The rate savings between the two is 1%, so for a 1% savings, you tie up X$ more per month. The key for me is, what are you otherwise planning to do with this money and would you earn more than that differential?

For example DH and I just put 10% down on a house instead of 20% because I felt leaving my 10% extra in the market would earn more of a return than the rate savings I got from  a larger downpayment.

Its very individual - if you feel like you would waste the money otherwise, than I would go for the 15. If you would invest it the extra cash flow each month, I might go for the 30 personally.[/quote]

Thanks for this, good point.  We are already putting 20% into 401k (with the matching it's 20%), have college savings funds on track, emergency fund for up to 12 months living expenses, plus a variety of investments (short and long term). I was thinking the 15 year would be another type of investment for us, and like you said, basically force us to "save" that money every month.  I was just unsure about the tax issue and couldn't figure out how to calculate it.    Thanks again[/quote]

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