[MonkeyMama]

We had 15-years on our first home. (When we were way less financially savvy). But we also had 2 incomes.

We refied to 30-years when we had 2 homes briefly, and kept it when we went down to one income and had our first child.

Anyway, we are getting back to the point where we could go back to 15-years and I have to say it is ENTICING.

BUT we have grown accustomed to the financial flexibility of a 30-year. The beauty of it is you can still make prepayments and pay it off sooner, but then you are not on the hook for the difference if you lose your job or go through a financial hardship.

Anyway, we were looking at the 15-years since interest rates had lowered for a bit and because interest rates are lower on shorter loans. We decided keeping our 30-year is best. We rather put more into our retirement for now, while we are still young and it is all tax-deferred. We didn't like the idea of adding $300/month to our fixed payments. Just too much of a stress for now. Kind of stressful.

But there are a lot of factors to consider here. What is the difference in the payment? How much equity do you have? How long do you plan to stay in your home? How is the cost of living? What are interest rates?

I would personally go for the home I want over cutting the price $25k for a 15-year-loan.

As far as what most people do, who cares. We want to pay off our home in our 40s and we will. I don't care that most people can't stick to a prepayment schedule. Prepayments allow far more financial flexibility. You can always refi to a 15-year down the road once you gain more traction, if rates become more favorable. I think it is something we will probably do in a few years. This would make sense as we pay off more principle, and if rates were still low, and we could accelerate payoff with the same payments. The only reason we are still considering it. Also, because we expect increased income. Overall though the 30-years makes far more sense for now.

In the meantime we decided we should have been funding our retirement in our 20s, not paying down our low-interest mortgage. So why I mentioned we weren't as financially savvy before. My general rule is not to pay more than the 30-year note until all of our tax-deferred investments are maxed out.