(MONEY Magazine) – Your December article on mortgage refinancing stated that replacing a 30-year loan with a 15-year loan can produce dramatic savings. That is not necessarily true. You reported that if Mr. and Mrs. Browning choose a 15-year $121,043 mortgage at 8.75%, they would pay $96,714 in interest over the life of the mortgage, compared with $229,575 in interest over the life of the 30-year mortgage at 9%. The Brownings might therefore conclude that the 15-year mortgage would save them $132,861. You have not, however, considered income- tax deductions on the interest payments, which -- if the Brownings are in the 28% marginal tax bracket -- could return approximately $70,000 to them over the life of the 15-year mortgage under current laws, but $165,000 over 30 years. Also, consideration must be given to the time value of the money. Because of inflation, today's monthly payment is worth more than that same payment will be in 15 or 30 years. If the Brownings opt for the 30-year mortgage, their monthly payment would be $236 less than for the 15-year mortgage. This money could be invested in a suitable vehicle such as a no-load mutual fund. Added on to the other advantages I've described, a 7% after-tax return in this investment would put the Brownings further ahead financially within 10 years by selecting the 30-year mortgage. / Kenneth L. Klegon Lansing