Quote:
Originally Posted by gatorfast
The rate spread between a 15yr and 30yr is so small right now I would personally just do the 30yr and pay some more each month if you want to pay it off sooner. At least then you have the flexibility to scale back if needed.
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I looked at this and if you can swing the 15 year it still has additional benefits besides just the rate.
$300k at 3% - 30 year term and at the end of the first 12 payments you have spent $8900 in interest
$300k at 2.5% - 15 year term and at the end of first 12 payments you have spent $7300 in interest
You can add more money to the 30 year loan to reduce the balance to the same level as the 15 year but you can't do anything about the $1605 you lost to interest (some of this is the interest rate, some the issue of the term). As time goes on these differences get smaller but it is still money lost as a larger part of the 30 year loan payment is going towards interest. Even if they were the same rate the 30 year would have you behind some amount.
https://www.bankrate.com/calculators...alculator.aspx