[Woody]

The others have made some good points, but I I thought I would add a few other things to think about. First of all this is not an easy question to answer and is very dependent on the individual. The first thing to consider is that you can generally get a lower rate with a 15-year than a 30-year and the amount of interest saved is rather large between getting a lower rate and borrowing the money for a shorter time period. For example, if you have a $300,000 loan at 4.0% for 30-years vs. a $300,000 loan at 3.375% for 15 years, the amount of intestest savings is $132,879. However, you are paying (investing) an additional $694 per month to get that savings of $132,879. The question you need to ask is can you invest $694 per month over the next 15 years and end up with more than $132,879.

The answer is it depends on what you invest the money in and how the investment performs. By selecting the 15-year loan, you are essentially selecting a "safe" guaranteed return. As long as you make the payment, you are guaranteed that return. If you instead take the 30-year loan and invest in the stock market you are selecting a higher risk investment with greater return potential, but no guaranteed return. While you can argue that the stock market has had a long-term average return of x% (7% 8%,9%), there is no guarantee you are going to get that return in the future. You are taking on more risk to potentially get a higher return. So the question becomes what is your risk tolerance. Do you want the guaranteed return or are you willing to take on more risk for the potential of a higher return, but also with the potential for a lower return.