Any thoughts on which mortgage option to choose?

[Walter Chong]

I have a choice between two mortgage options for a property I'm looking to purchase. 

1. 10 year fixed at 4.9%

2. 5 year fixed at 4.375% and then 5 year fixed at the then-current 5 year Treasury rate + 2.75%

The way I see it, I should choose the first option if rates don't rise more than 0.9% by 5 years from today. I should choose the second option if rates will have risen by more than that in 09/2022.

Any thoughts? I realize no one can predict the future, but how should I choose?

Am I allowed to cross-post? It seemed appropriate to post in the private lending & conventional mortgage advice forum as well, but most places frown upon cross-posting...

Thanks in advance!

[Matt Scholten]

I would go with the first option. There is value in knowing that your payment will not rise. If the numbers do not work with the fixed rate loan, then you should probably not do the deal.