re: I’m surprised to see so many advocating for 15 year mortgages on here

Ahh ok, you dont know what you're talking about then

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Ok...why not just refinance to a 30 year and invest the difference? Gives you more flexibility and lessens the opportunity costs big time.

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Invest the difference, hmm... id rather pay my home off in 15 or less, freeing up 1600-2000 month over refi into another 30 and investing the $200-$300 in savings.

I was having the same thoughts reading the other mortgage thread. I think I agree with going for the 30 vs the 15 as well. I’ll pay 3% forever and use my money more productively, in theory, elsewhere. A couple tenths of a point interest rate doesn’t seem worth it? What am I missing, feel free to tell me why I’m wrong

Edit: you can always accelerate your principle payments if and when you choose on a 30yr

Here's a decent article showing actual numbers on 15 year vs 30 year and investing. Of course everyone's rates can be different.

LINK

30yr $250k @ 4.25% = $1229/mo (total cost = $442,745)
15yr $250 @ 3.25% = $1757/mo ($528/mo difference) (total cost = $316,200)
15yr $250k @ 2.75% = $1697/mo ($468/mo difference) (total cost = $305,380

30yrs $528/mo @ 9% avg = $973,882
30yrs $468/mo @ 9% avg = $863,214
15yrs $1,757 @ 9% avg = $669,845
15yrs $1,697 @ 9% avg = $649,971

30yr vs 3.25% adjusted for total cost = $847,337
30yr vs 2.75% adjusted for total cost = $725,848
The 30yr vs the 2.75% is still even higher the the 3.25% difference invested. Beats it by $200k

So yes the 30 yrs is better for lost opportunity cost. I would take the 30 yr over the 15 yr.
reason for this is when you invest your first $1,757/$1,697 you already have $201,297/$178,422 built up compounding when you invest your first dollar with the 15yr.

Security

Yes I agree with that. Individual factors do play a part and how risky you are. Such as already having an emergency fund and etc.

Also, another advantage I found with a credit union with a 15 year is if you put 10% down PMI gets waived because for them it was considered an in house loan.

And you can speculate the investment return at 5-10% but that's not guaranteed.

A 15 year rate at 2.5%(the one I got) is guaranteed.

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Yeah, at my age, 55, I don't need to invest the additional, I would rather get the 15, pay on it till 62, and let my SS start paying my house payment at that point.

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A common theme in a lot (most?) of the threads that attempt to show one debt vs. investment strategy always being superior to another is that the OPs tend not to understand the concept of risk adjusted returns, age appropriate investments or just the simple fact that not every poster is in the same life situation as every other poster.

This 8% (average - wink wink) return comes up again & again, simply because that's close to the historical return of the S&P 500. Nothing is typically said about the peak to trough drawdowns that the market has experienced during certain periods. And very few seem to understand the concepts of risk adjusted returns, or even what a Sharpe ratio is.

But say, in your case, if you were heavily invested in an S&P 500 fund, that likely would NOT be age appropriate - depending on your other retirement assets, of course. And the lower returns you'd be receiving from being in things like income funds, or just less risky investments, would most certainly be major factors in your 30 vs. 15 decision... in addition to the fact that you probably wouldn't want to be saddled with a mortgage when you're 85. It likely wouldn't make good sense for you to get a longer dated mortgage, at a higher interest rate, just so you could invest the lower payment delta into a lower yielding income security.

But for others, once they fully understand the concept of risk adjusted returns (in addition to this "opportunity cost" that they like to refer to), and have a handle on how long they'll actually be in the house and what age appropriate investments are yielding... the 30 yr. really may be the best decision.

Every situation is different. That's all I'm saying. Contrary to what's being suggested in the OP of this thread, there is no universally correct answer.

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This 8% (average - wink wink) return comes up again & again

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Let's also remember that mortgages are at historical low's right now. They are pretty incredible. If they were 5-8% or even more, this really wouldn't be a topic of conversation as I'm not sure anyone is choosing a 30 year at 6.5% instead of a 15 year at 6%.

When the virus wipes out 30-40% of market due to a recession people may wish they had used excessive funds to pay down mortgage.