Also, although any good mortgage shouldn’t have prepayment penalties, I have heard horror stories of borrowers having a hard time getting their bank to apply the prepayments correctly. (Banks will try to apply extra payments as early payments rather than principal reduction payments). The difference is subtle, but allows the bank to charge more interest…surprise surprise.

If your bank allows you to make penalty free additional payments at any time, which to my knowledge is common practice but I may be wrong, wouldn’t it be a much better idea to go with the 30 year as opposed to the 15 year, then just make additional payments equal to the what would be payed for the 15 year mortgage each month?

That way you save on interest in the long term, but protect yourself in the case of a job loss or unexpected expenses, as you could just take a few months off from the extra payments, then make up for them later.