There are three elements that make the case even more strongly for sticking with the 30-year fixed loan and not paying more than the minimum required payments (i.e., not paying extra to reduce the principal faster). As I describe in detail here, those factors are inflation, tax deductions, and security.

Inflation is the borrower’s friend and the lender’s bane. It makes every future payment worth less and less compared to the first payment, and the value of every dollar in the remaining balance worth less and less over time.

The mortgage interest tax deduction is somewhat less valuable now that the the deduction is only for interest on the first $750k of mortgage balance, tax rates are lower, and standard deductions are higher. However, if your marginal tax rate is high (including state and local income taxes), it’s still a significant help in covering your mortgage payments at a lower out-of-pocket cost.

Finally, if you choose to pay an extra $600/month to pay off your loan faster (whether by accelerating payments on a 30-year loan or by opting for a 15-year one), and suddenly lose your job after 10 years, you will most likely lose your home. If you instead invest that extra $600/month for those 10 years, you’ll have a large pot of money available to keep making mortgage (and other) payments until you get back on your financial feet.

This is the true security. People who worry about having a mortgage debt on their personal financial books just don’t understand this concept. In fact, if you invest the extra money, when the day comes that you would have been able to have your loan paid off early, you’ll have more than enough in your investment account to pay off the remaining balance at once, and still have a nice chunk of change left over.