Reply to If you don't have a 15 year mortgage, you're living beyond your means?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]We refinanced to a 2.875% 30 year conforming mortgage during the first year of the pandemic. It's still a great decision because there are very few areas where we can get that kind of leverage and invest the rest in the stock market. Oh and we have a PITI ~$3K and nearly $1 million in home equity ($1.5 million home). With inflation where it is, having low cost, long term fixed debt is a great "investment". Right now, I can invest our cash in a high earning account! It has nothing to do with living beyond our means. It's the equivalent of shorting Treasuries.[/quote]

I’m one that is absolutely in favor of the 15 year route. That being said, well played…assuming you’re being truthful. I refinanced with a cash-out refinance mortgage from a 15 year to a 30 year with the sole objective of having money to invest in growth equities post-COVID crash. My monthly payment didn’t change, but I walked away with more than $1M in cash that I turned around and invested in the market a few months back. Portfolio is already up from $1M to $1.7M. [/quote]

I'm the PP. I think a 15 year is fine but it reduces your flexibility and only provided 40-50 bps of interest rate savings relative to a 30-year (at least at the time I was considering a refi). For some, a 15-year is a good way to create forced savings if you lack discipline elsewhere in your financial budget. While I could save a little on interest, I figured having the flexibility to accelerate the paydown on a 30-year (to make it a 15) was better optionality. However, since inflation spiked, I've stopped all prepayments. I am happy to make my minimum fixed payment each month and if inflation continues at an elevated rate, it will look better and better with time That's our only debt and with a PITI of ~$3K, it's lower than we'd ever get for an equivalent apartment in our area of Montgomery County. [/quote]

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