Yeah but you can (usually) just pay the same amount with a 30yr as if you had a 15yr mortgage, but you still have the added security that if you fall into hard times, you have a lower mandatory payment with the 30yr.
Also you’re correct about the higher cost of the mortgage, and this doesn’t really work as well at 6%… but if you had a 3% mortgage, you would have better returns taking the 30 year and investing the difference each month. The amount of money you’d make from the returns on that would, on average, be greater than if you paid off the mortgage in 15, then started investing. But yeah, doesn’t work as nicely at 6%.
When I refinanced my 30 year fixed a long while back, I had a choice of 15 or 30 year terms. 15 year was a little lower, but your right that it wasn't much but it was a little lower--so that's what I took. But it was a pretty modest mortgage at that point (when I bought the house it was pretty much a fixer-upper) so I wasn't really worried about making payments. Getting a 30 year as an insurance policy is probably the right answer for many people even if it costs a bit more.
>but if you had a 3% mortgage, you would have better returns taking the 30 year and investing the difference each month
That would have been a good strategy over last decade certainly. Though that's hindsight and you're effectively taking out a loan and investing the money.
Also you’re correct about the higher cost of the mortgage, and this doesn’t really work as well at 6%… but if you had a 3% mortgage, you would have better returns taking the 30 year and investing the difference each month. The amount of money you’d make from the returns on that would, on average, be greater than if you paid off the mortgage in 15, then started investing. But yeah, doesn’t work as nicely at 6%.