refi mortgage term

[darthvader]

We are refinancing to a fixed rate from an ARM physician loan...

I think I may be making this too complicated but here's the offers

30 year fixed 4.0% payment $1600/mo

20 year fixed 3.75% $1900/mo

15 year fixed 3.25% $2340/mo

We could swing any of these from a monthly budget perspective....I'm just thinking about that $900/month difference and what we could do with the $900/mo instead in terms of backdoor roth, student loans, etc.  This won't be our forever home, we'll upgrade in 5-10 years to our forever home.

Thoughts? Thanks all!

[DMFA]

How many more years before the adjustable rate starts? What's your current rate? What's the cost of the refi? Is "none of the above" a possible answer?

Generally your tax-advantaged investments and paying student debts (you've refinanced those too, right?) would be prioritized ahead of paying off your mortgage.

Inability to pay your cost of living, student debts, and maximizing tax-advantaged accounts is a sign of having too much house or otherwise imperfect budgeting...might want to look into that a bit more closely.

...but, to answer your question with a generality, mortgage debt is probably the lowest rate, most secure, and most easily manageable debt, so I'd take the 30-year in your situation (which is less than ideal, but that's okay, let's deal with what we've got). Later on, if your loan allows for penalty-free overpayment, you can just pay over the minimum if that becomes a priority.

[darthvader]

Current rate is 3.125 and it will adjust next June. Student loans refi'd in the 3s%

[adventure]

I'll assume you'll itemize, although it might be close with the 30 year. If you're in the 5 to 10 to ?? year bucket, this provides great stability.

I'd take the 30 year. That allows you to leverage the cashflow for other, higher return activities. Fill up the emergency fund, student loans, student loans, other debt, roth, taxable, extra mortgage payments, family out to dinner, etc.

Nice work on the refi!!