Zeev's Turnips Patch-No Politics (ZEEV)

[Smart_Money]

"you end up paying more interest with the 30 year, not to mention that the interest amount per year drops faster with a 15 year than a 30 year."

Not true. You are not penalized more by taking a 30 year loan. That is what lenders tell you and want you to believe. To prove it, you can take a 30 year mortgage and pay it as if it was amortized for 15 years and pay no more interest than a 15 year loan from day one. Taking the 30 year loan at TODAYS low rate and pay the mortgage as if it is a 15 year loan, so you will have the option to pay less on months of unexpected expenses. For the person who wants more flexablity (which I advocate) paying the difference into an interest bearing account every month and wait for the day CDs pay more that 5.5%. That way it will reduce your 5.5% even more.

For Example, Just think if rates go to 8.5% (which was not long ago) and you had the 5.5% 30 year loan and the bank was paying you 7% on the CD for the ACCUMALATED difference. You would be smiling all the way to the bank.