Refi to 15yr mortgage or invest?

[megs193]

The article about mortgage rates being at an all time low made me think about refinancing to a 15 year mortgage. We bought our house 3 years ago and have a 30 yr at 4.375%. If we could get a 15yr at 3% it would cost us $600 more per month but we would saver over $200,000 in interest. We could afford the payment but the money would have to come out of what we currently invest. We aren't sure if we will stay in our current house forever but we will definitely be here for the next 5-10 years. I am guessing we would be better off investing our money but I wanted to get other people's opinions.

[imojoebunny]

I don't know that you would. $600 is a lot of money to pay toward your house and not invest, when you could have a relatively low rate, especially if you don't plan to stay. We just did a 15 year, but we are older and have lots of other investments and some other tax shelters. You really won't save $600 a month, but roughly what ever the difference in your (interest rates X principal)- (15 year rate X principal) X your tax rate. You might well be able to make more by investing in other things, particularly things like your 401K where you would not pay tax.