PSA: Why you SHOULDN’T get a 15-year Mortgage

Boats and Hoes are looking pretty good right now.

46 now moving after a home fire tbh i don’t think I’ll be alive in 30 years don’t want to leave my children with a house they can’t afford.

Forgot to mention HELOC to access the equity of the home

Yeah, but if you pay off your mortgage faster, that's 15 years where 100% of your income would go to investments instead of mortgage, which ends up making you more when you combine the saved interest with the more invested.

A lot of it depends on where you want to put your risk.

invest = give random people to hold your money and if they go bankrupt you end up with nothing. There is never investment scenario when you lose your investment. Like it is impossible.

Because then "investors" will have to work instead of living off your money.

What a bs )))) 30 year mortgage is only profitable to the banks. Banks do not care so much about that you pay your principal in 30 y from now with devalued money. Most importantly is that you pay all that interest FIRST! So means in the very first years of your mortgage when inflation did not devalued your dollars yet. That's it. They could even forgive you that principal after 25 years who cares)))) they already squeezed you like the lemon. Just look at what is called amortization graph for 30 y vs 15 y mortgage. Guy is not stupid he is just paid by financial mafia.

The first 15 of the 30 years you're paying majority interest. So you don't even build equity until 15 years in... and inflation effects everything. If you have to fix a hvac then that's more expensive. And most people gonna end up refinancing the moment they see lower interest rates just to lower their monthly but they will just end up paying interest all over again and never build equity until they die.

Good advice if you live in a perfect world

This video is biaised because after 15 years mortgage it will be paid off so in this example you would have $300,000 to invest on top of the $2300 he is talking about. While on a 30 years mortgage after 15 years only about 30% will be refunded.

Does this video still apply when interest rates are higher like they currently are?

What’s the deal w the cars in the background.. never trust a guy that doesn’t drive a beat up Tacoma

The problem with this argument is that you have to actually make the effort and have the forethought to invest that money. The 15-YR mortgage is the easy button.

Good points

Is there an updated video, given today's inflation and higher interest rate?

Best video yet! Made so much sense.

Lets be real most people will do the 30 because its the only way to get a home. 15yr is only an option for a small population

who say's i am going to unsun.....

boats and hoes lol that was funny but ye s I agree with his logic on the 30 years

Clear as mud huh?

My wife showed me this video. We have invested zero dollars as adults and we are in our early 30's, my opinion is that it's really difficult to shape that behavior and teach yourself to start seriously investing. I have also read that there are penalties for paying off your 30 year loan early, is this true?

Get a 30 year mortgage to take out more debt.. yikes

Is that a green screen, if not why’d u choose to get a lotus what is ur opinion on that car and is it a standard?

Because you are an idiot . My daughter just took out a 10 year mortgage and will be mortgage free by the age of 36. I think that is good as she does not pay the bank 100,000 and saves all that money.

One question if i have an apartment and i need to take mortgage on it and from this mortgage to buy an apartment.
The policy of the bank they need a 20% of the mortgage value as liquidity ?

The thing is that people will opt for a higher priced home and won't have that extra money to invest. At the end, having money is about psychology and mindset.

this video hasnt aged well.

I'll take 30 since I'm rent is increasing anyways, 30 years fix rate is no big deal, I can put my extra income to dividends, stock, futures and options/currency trading.

Where should I invest the money?

You forget about one thing, most of people get salaries. Salaries don't quite catch-up to inflation. Debt IS NOT for poor people. We, poor people, need a giant down payment and pay it as fast as possible. Otherwise we're on the treadmill.

Counting on historical S&P returns like they are a given for the future is gambling. I see more and more people treating the stock market like it is a guaranteed interest rate. The entire US public is creating a bubble that won't be able to be bailed out when it finally pops.

Building home equity versus not is the single most important financial step for any first and second home buyers including future investment, because five years later, you have 100 grand in equity. Five years later, after a 30 year mortgage, you’re stuck. Stuck stuck stuck. It’s only makes sense if you work for the bank, or have a vested interest in people doing 30 year mortgages.

Wow where do I begin?! First of all the amort tables you used showed only 50/50 principal/interest. Bought my first townhome in MN 2005 for $200,000 30 year fixed at 5ish percent. Paid 1400 a month for five years never missed a payment and my principal was down $10,000. Meanwhile by 2008 the value of our house was down to 60,000. So me and my wife learned what being backwards wise. Thanks to you and the 30-year-is-glorious bank tribe. Second townhouse I bought for $150k in 2011. 15 year fixed @ 3.5%. $1200 a month, $300+ interest / $900 a month principal. What say you @graham stephan?? Still amazes me how many people tried to push another 30 year on me??? And they always say the classic schill line ‘if you want to bring your principal down you can pay that extra yourself and it will come down the same. 😡

All this video says after all the hypotheticals is that floating on debt can make more. However in a down market all of your debt can be called at once when you are spreading yourself over multiple debt-financed assets and you will have to file bankruptcy.

You convinced me, Graham.

Mathematically this advice is genius. Practically for the average person this advice is stupid.

Boats and gardening tools? What do you think I am? A gnome?

Graham, re do this video now in 2022 Q4, same thoughts? or new strategy?

It's not tasteful to ask someone to like a video they haven't even watched yet. That aside, good video, thanks.

didn't you think bout recessions coming rising the mortgage payments, actually I'm not pretty sure if that happens but it does could've changed everything

Would you still recommend this 30 year loan for someone buying a house at 62? Considering too that they stop working at 67 years old and have a pretty substantial income during their working years?

I agree you get flexibility. Most people wont invest with the flexibility they will miss spend it. You are kind of a unicorn.

2008 call....housing always goes up. Lol.

Your assuming we would never have deflation.... and increase your beta. Dave Ramsey would not approve.

But your just borrowing to invest.

Did you say hos? Twice?

I always learn something from you, thank you so much 🙏 ❤