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15 vs 30yr mortgage - for those 15 yr people, would you change given current climate?

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  • 15 vs 30yr mortgage - for those 15 yr people, would you change given current climate?

    In the process of buying our first home post-residency and have read several threads on WCI about the 15 vs 30 year fixed mortgages and there are obviously people who fall on both sides of the discussion for a variety of valid reasons. Given those factors, we were definitely leaning towards fixed 15 year plan for the lower rates, but more importantly, being mortgage free in 15 years. However, given the falling mortgage rates with all the coronavirus turmoil, have any of the "15 year" people rethought that decision? Extremely low mortgage rate for 30 years and using the extra cash to invest is appealing...of course that assumes that you have to do the investing part of it (and not spending).

  • #2
    Beginning career? 30yr. Fixed. Gives you a bigger capital flow for investing for the future. As you said the hard part is lifestyle creep

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    • #3
      Investing ROR even after tax probably favors 30 yr. Behavioral finance most likely means you would cut other spending to pay it off. Unintended bonus if you fall into that one.

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      • #4
        physician loan. 0-10% down, 30 year.

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        • #5
          I literally went back and forth over and over 15 and 30 year just a few months back. Even posted my reasoning on here a few places for both.

          Long story short, we didn't appraise, had to go with a 90% loan with a PMI and slightly worse rate (construction loan, not a lot of doctor loan options here), and it pushed me to go with a 15 year loan for the rate savings.

          We are at 3.625% fixed construction-to-permanent 15 year term. Even before the market took its ************************ and today's second emergency rate drop, I was planning on doing a refi at the end of construction, to drop the PMI and hopefully shave a few points.

          At this point, I think I should easily be able to get something sub-three at the end, and if the market is still in the toilet, it would be really hard to justify going with a 15 year loan which would tie up so much capital.

          However given how I'm such a cheapskate, I can imagine I would still lean heavy to the 15 year loan, assuming it would be about a .25% savings, which it always seems to be.

          To be clear though, the textbook answer is always 30 year and invest the rest. At least with the rate environment we've had for the past couple decades.

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