Quote:
Originally Posted by maat55
It boils down to what floats ones boat. I'll stick with the system that works for me. On an amoritization table, I win every time.
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As a Dave Ramsey supporter, I have to disagree with this. I think Dave would admit that mathematically, if everything works out perfectly (meaning you actually do invest the difference of the payments, and you actually realize an 8% return) the 30 year mortage is generally a better deal. I believe his rationale for pushing the 15 year mortgage is that it forces you to buy less house than if you get a 30 year mortgage, because the banks qualify you based on the monthly payment.
That said, if you are in your 50s or 60s and getting close to retirement, and you have the cash flow to pay off the house early and still put some in your retirement, you should probably pay it off early. At that point, you should be more conservative anyway and the guaranteed return is more of a no-brainer.
I recently advised my mother to pay off some property with an inheritance she received. She had the money in CDs, making around 3-4%, versus a 6% mortgage.